One-glance verdict
Undervalued
$168.08 our estimate vs market $69.55
Wall Street consensus: $66.66 (-60.3% lower than our fair-value estimate)
59% below our estimate, below the bear case
Fundamentals snapshot
Cognizant Technology Solutions Corporation
CTSH · NMS · Technology · Information Technology Services
Current price
$69.55
52-week range
$37.08 - $87.03
Market cap
$31.33B
Balance sheet
Healthy
89.92x Strong cushion
Net debt $1.04B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 1.4% last year.
- Reward Free cash flow was positive in 10/10 years.
- Reward Trades at 14.7x P/E vs peer median 15.5x (5.0% cheaper).
What this company does
Cognizant Technology Solutions Corporation
Cognizant provides technology consulting and outsourcing services to businesses across various industries like finance and healthcare, helping them with things like artificial intelligence and improving their operations. The money they make comes from these services, and it matters because it shows how well they are helping their clients succeed in the fast-changing tech world. They also offer automation solutions that aim to make businesses run more smoothly and efficiently, which can lead to cost savings for their clients.
How the company got here
Cognizant Technology Solutions Corporation was founded in 1988, initially focusing on providing IT services to businesses. It grew steadily by helping companies manage their technology needs, especially during the dot-com boom. A key turning point was its expansion into outsourcing, allowing it to offer cost-effective solutions to a global clientele. Over the years, Cognizant has adapted to the evolving tech landscape, investing in new areas like cloud computing and digital transformation to stay competitive.
What it actually does
Cognizant is a professional services company that helps other businesses with their technology and operational needs. Think of them as a highly skilled IT department for hire. They offer a wide range of services, from designing and building new software to maintaining existing systems and managing complex business processes. Their goal is to make other companies run more efficiently and effectively using technology.
Financial Services
This segment provides technology and consulting services to companies in the banking, capital markets, payments, and insurance industries. Essentially, Cognizant helps these financial institutions modernize their operations, manage risks, and improve customer experiences through technology. This is a significant part of Cognizant's business, contributing a substantial portion of its overall revenue.
Health Sciences
In this segment, Cognizant offers its expertise to healthcare providers, life sciences companies (like pharmaceutical and biotech firms), and health insurance payers. They help these organizations improve patient care, streamline drug development, manage health data, and enhance administrative processes. This area represents a growing and important part of Cognizant's services, addressing the complex needs of the healthcare industry.
Products and Resources
This segment serves a diverse range of clients, including manufacturers, automakers, retailers, consumer goods companies, and businesses in the energy and utility sectors. Cognizant assists these companies in areas like supply chain management, improving manufacturing processes, enhancing customer engagement, and adopting digital technologies. It's a broad segment that touches many aspects of how physical goods are made, sold, and delivered.
Communications, Media and Technology
Cognizant works with companies in the telecommunications, media, entertainment, education, and technology sectors through this segment. They help these businesses navigate digital disruption, develop new platforms, manage content, and improve their IT infrastructure. This segment is crucial for companies looking to innovate and adapt in rapidly changing digital markets.
What management is betting on now
Cognizant's leadership is currently focused on expanding its capabilities in artificial intelligence (AI) and digital transformation. They are investing in developing AI-led automation solutions to help clients simplify and speed up the adoption of new technologies. A key strategy involves forming partnerships, like the one with Uniphore Technologies, to create advanced AI solutions that can reimagine customer experiences and drive business growth for their clients.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q2
$183.00M
FY2024 Q3
$791.00M
FY2024 Q4
$837.00M
FY2025 Q1
$323.00M
FY2025 Q2
$331.00M
FY2025 Q3
$1.16B
FY2025 Q4
$781.00M
FY2026 Q1
$198.00M
Revenue
$5.41B
Net income
$662.00M
Diluted EPS
1.39
Operating cash flow
$274.00M
Free cash flow
$198.00M
Fetching…
Sources
Revenue
$5.33B
Net income
$648.00M
Diluted EPS
1.35
Operating cash flow
$858.00M
Free cash flow
$781.00M
Fetching…
Sources
Revenue
$5.42B
Net income
$274.00M
Diluted EPS
0.56
Operating cash flow
$1.23B
Free cash flow
$1.16B
Fetching…
Sources
Revenue
$5.25B
Net income
$645.00M
Diluted EPS
1.31
Operating cash flow
$398.00M
Free cash flow
$331.00M
Fetching…
Sources
Revenue
$5.12B
Net income
$663.00M
Diluted EPS
1.34
Operating cash flow
$400.00M
Free cash flow
$323.00M
Fetching…
Sources
Revenue
$5.08B
Net income
$546.00M
Diluted EPS
1.10
Operating cash flow
$920.00M
Free cash flow
$837.00M
Fetching…
Sources
Revenue
$5.04B
Net income
$582.00M
Diluted EPS
1.17
Operating cash flow
$847.00M
Free cash flow
$791.00M
Fetching…
Sources
Revenue
$4.85B
Net income
$566.00M
Diluted EPS
1.14
Operating cash flow
$262.00M
Free cash flow
$183.00M
Fetching…
Sources
Is it cheap or expensive?
Fair value $168.08 vs current price $69.55
Wall Street consensus is the average analyst price target: $66.66 (-60.3% lower than our fair-value estimate).
Our most-likely fair value is $168.08 a share — about 141.7% above today's price of $69.55, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net debt $1.0B. Interest coverage 89.9x.
Net debt
$1.04B
Interest coverage
89.92x
Cognizant Technology Solutions Corporation's profit covers its interest bill about 89.9 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
CTSH
BASELINE
Cognizant Technology Solutions Corporation
Total debt $2.09B Interest coverage 89.92x This is the baseline the peer rows are being compared against.
Total debt $923.00M Interest coverage 87.00x -3% vs CTSH Has roughly the same debt cushion as CTSH.
Total debt $13.40B Interest coverage 47.43x -47% vs CTSH Carries about 1.9x less debt cushion than CTSH.
Total debt $2.34B Interest coverage 18.86x -79% vs CTSH Carries about 4.8x less debt cushion than CTSH.
Total debt $1.41B Interest coverage 10.34x -88% vs CTSH Carries about 8.7x less debt cushion than CTSH.
What you should know
The case for and against CTSH
3 Rewards
0 Risks
Rewards
-
Revenue grew 1.4% last year.
-
Free cash flow was positive in 10/10 years.
-
Trades at 14.7x P/E vs peer median 15.5x (5.0% cheaper).
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
14.67x
Forward P/E
10.98x
P/B
2.17x
P/S
1.45x
EV/EBITDA
8.02x
PEG ratio
0.99x
Profitability
How much profit each dollar creates
Gross margin
33.4%
Operating margin
17.5%
Net margin
10.3%
ROE
14.9%
ROA
10.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.14x
Current ratio
2.18x
Quick ratio
1.68x
Total debt
$2.09B
Total cash
$1.05B
Growth
How the business has been compounding
Revenue TTM
$21.41B
Revenue 5Y CAGR
3.3%
EPS TTM
4.74
EPS 5Y CAGR
1.1%
Cash flow
How much cash the business throws off
Operating CF TTM
$2.76B
Free CF TTM
$2.60B
FCF margin
12.1%
Dividend
Shareholder payout
Yield
1.9%
Payout ratio
27.5%
Last ex-div date
2026-08-18