One-glance verdict
Undervalued
$127.73 our estimate vs market $58.51
Wall Street consensus: $65.10 (-49.0% lower than our fair-value estimate)
54% below our estimate, below the bear case
Fundamentals snapshot
Cognizant Technology Solutions Corporation
CTSH · NMS · Technology · Information Technology Services
Current price
$58.51
52-week range
$37.08 - $87.03
Market cap
$26.36B
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 12.6x P/E vs peer median 13.4x (6.5% cheaper).
What this company does
Cognizant Technology Solutions Corporation
Cognizant is a technology consulting company that helps other large businesses manage their digital operations, like building custom software or using artificial intelligence to improve how they work. The company makes money by charging for these long-term projects and outsourcing services (handling a company's business tasks for them), with most of its revenue coming from clients in the financial and healthcare sectors. Because its success depends on these large contracts, investors watch closely to see if Cognizant is winning new clients and getting more business from its current ones.
How the company got here
Cognizant started in 1994 as the in-house technology team for Dun & Bradstreet, a business data company. It was spun off and became its own public company in 1998, just in time for the dot-com boom. The company grew quickly by taking on the essential but less glamorous technology work that bigger companies didn't want to do, like maintaining their computer applications. Over the years, it expanded into a much broader professional services company, helping businesses with everything from consulting to managing their operations.
What it actually does
Cognizant is a company that other businesses hire to help them with technology and improve their operations. Think of them as expert consultants and a tech support team for huge corporations. For example, they might help a bank build its mobile banking app, assist a healthcare company in managing patient records securely, or help a retail brand run its online store more efficiently. They don't sell a physical product you can buy in a store; instead, they sell their expertise and services to help other companies succeed in a digital world.
Financial Services
This is one of Cognizant's largest and oldest business areas, serving banks, insurance companies, and other financial firms. They help these clients with tasks like modernizing their core banking systems, creating digital payment methods, and managing risk and compliance (following industry rules). For example, when you deposit a check using your phone's camera, a company like Cognizant likely helped build and maintain the software that makes it possible. This segment provides a significant portion of the company's total revenue (the money it earns from sales).
Health Sciences
This segment focuses on companies in the healthcare and life sciences industries, like hospitals, health insurers, and pharmaceutical companies. They provide services that help manage clinical trial data, streamline the processing of insurance claims, and improve how patient data is handled. For instance, they might help a life sciences company analyze data from drug development or help an insurance provider automate its claims process to pay doctors faster. This is another major part of Cognizant's business, making up a large slice of its revenue.
Products and Resources
This division works with manufacturers, retailers, and companies in travel, hospitality, and energy. Their goal is to help these businesses operate more efficiently and serve their customers better. This could involve improving a company's supply chain (the entire process of making and delivering a product to a customer) or implementing new point-of-sale systems for a retail store. For an automaker, they might help develop the technology that goes into a car's dashboard.
Communications, Media and Technology
This part of the company serves businesses that create and distribute information and entertainment, as well as other technology companies. They help these clients build and manage digital platforms, improve customer experiences, and launch new technology services. For example, they might work with a media company to help it stream video content to millions of users or assist a software company in testing its new applications before they are released to the public. This segment helps companies that are at the center of the digital economy.
What management is betting on now
Cognizant's leadership is heavily focused on what it calls digital transformation, which means helping clients modernize their businesses using the latest technologies. A huge part of this strategy is artificial intelligence (AI), where they are helping companies automate tasks and gain insights from their data. They are also prioritizing cloud computing (helping companies manage their data and software on the internet instead of their own servers) and the Internet of Things (connecting everyday objects to the internet). To grow in these areas, Cognizant often acquires smaller, specialized companies to quickly gain new expertise and technology.
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 $127.73 vs current price $58.51
Wall Street consensus is the average analyst price target: $65.10 (-49.0% lower than our fair-value estimate).
Our most-likely fair value is $127.73 a share — about 118.3% above today's price of $58.51, 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 $2.21B 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 12.6x P/E vs peer median 13.4x (6.5% 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)
12.56x
Forward P/E
9.24x
P/B
1.83x
P/S
1.22x
EV/EBITDA
6.79x
PEG ratio
0.89x
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
4.66
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
2.2%
Payout ratio
27.5%
Last ex-div date
2026-08-18