QualityDipStocks / Technology · IT services
Cognizant Technology Solutions CTSH
Not in a dip by our rules: 25% below its 52-week high.
A quality company trading well below our fair value estimate.
- Fair value est.
- $83.21+28%
- Market Value
- forming
- Off 52-wk high
- −25%
- Risk vs market
- Lowbeta 0.05
5 bullish · 3 bearish See why
Key levels
Every level vs today’s $65.11
- 52-wk lowlowest close, 1 year$38.73−40.5%
- PriceFri Oct 30 close$65.11you are here
- Fair value est.base case$83.21+27.8%
- 52-wk highhighest close, 1 year$86.70+33.2%
Fair value estimate
How the range is computed
Ten-year free-cash-flow DCF. Same 10-year free-cash-flow model as the base: discount rate 9.5% ±1 point and growth 3.0% ±2 points. Bear = 10.5% and 1.0%; bull = 8.5% and 5.0% (both fade to 3%). A model estimate from public filings, not a forecast of where the price will go.
Price sits inside the range.
What the price implies To be worth today’s price, CTSH’s free cash flow would need to shrink about 1% a year for five years; our estimate uses 3%.
Risk vs market
How risk vs market is measured
One year of daily returns (Oct 30 to Oct 30, 252 sessions). Beta = how much CTSH moved for each 1% move in the S&P 500 (SPY); 1.0 moves with the market. Volatility is the yearly standard deviation of daily returns. Past behavior, not a forecast.
Has moved mostly independently of the market, but its own price swings are 3.4× the S&P 500’s (it moves on its own news).
- Beta vs S&P 500
- 0.05
- Volatility
- 43% vs 13% SPY
- Correlation SPY
- 0.01
- Correlation QQQ
- −0.15
Bull vs bear
Rule-based from the data on this page, strongest first. Not advice.
Top bullish points 5 of 5
ValuationOur DCF fair value estimate is $83.21, 28% above the price.
ValuationP/E of 11.4× is 36% below its own average of 17.7× at the last 3 fiscal year-ends.
ValuationP/E of 11.4× vs a 33.9× median for the 138 Technology companies we cover.
Cash returnsShare count down 7.6% in a year: $2.2B of buybacks over 12 months.
ValuationFree-cash-flow yield of 8.1% (price / FCF 12.4×): $2.4B of free cash in the last 12 months.
Top bearish points 3 of 5
GrowthSales grew 5.0% over the last 12 months, below the 18% median for the 163 Technology companies we cover.
GrowthSales grew only 2.8% a year from FY2022 to FY2025.
GrowthDiluted EPS grew 1.1% in the last fiscal year, below the 18% median for the 118 Technology companies we cover.
Who’s talking about it
Notable investors, executives, analysts and public figures on Cognizant Technology Solutions in the last 48 hours. Headlines as published, each linked. Their words, not ours.
No notable mentions in the last 48 hours. Checked Nov 1, 9:09 PM ET.
Compare with peers
Closest in size in IT services
All fundamentals
P/E 11.4 · FCF yield 8.1% · ROE 17%
Valuation
- P/E
- 11.4×3-yr-end avg 17.7× · Technology median 33.9×
- Price / FCF
- 12.4×
- FCF yield
- 8.1%
- EV / EBITDA
- 7.3×
- Price / sales
- 1.34×
- Price / book
- 1.99×
- Market cap
- $29.3Bprice × diluted shares
- Enterprise value
- $29.3B
Growth
- Revenue, 12 months
- $21.9B
- Sales growth, 12 months
- +5.0%vs the 12 months before
- Sales growth, 3 yrs
- +2.8%/yrfrom FY2022
- Diluted EPS, 12 months
- $5.48
- EPS growth, last FY
- +1.1%
- Net income, 12 months
- $2.6B
- Net income growth
- +21%12 months vs before
Profitability
- Gross margin
- n/agross profit isn't reported (common for service and financial companies)
- Operating margin
- 15.7%
- Net margin
- 11.8%
- FCF margin
- 10.8%
- Return on equity
- 17%
- Return on invested capital
- 17%
Balance sheet
- Cash & short-term inv.
- $1.6B
- Total debt
- $1.6B
- Net cash
- $0
- Debt / equity
- 0.11×
- Interest coverage
- 73.2×operating income / interest
Cash flow & returns
- Free cash flow, 12 months
- $2.4B
- FCF growth, 12 months
- −11%
- Dividend yield
- 2.10%$616M paid
- Payout ratio
- 24%
- Buybacks, 12 months
- $2.2B7.6% of market cap
- Share count, 1 year
- −7.6%diluted shares vs a year ago
- Stock-based comp
- $193M
Trailing 12 months to Sep 30, 2026; balance sheet at Sep 30, 2026. From Cognizant Technology Solutions’s SEC filings. Sparklines show up to six fiscal years. n/a means we don’t hold that number, with the reason. How each is computed.
Valuation details
DCF $83.21 · FCF value $136.22
Assumes 3.0% growth for 5 years (revenue grew 2.8% a year FY22–FY25; floored at 3%), fading to 3%; 9.5% discount rate, 3% terminal growth. FCF base $5.25 a share (trailing 12 months to Sep 30, 2026), from the 10-Q filed Oct 29, 2026. Net cash $0M, not added.
Setup & signals
No setup armed
No setup armed, so there’s no trigger or stop to track yet. Reversal signal rules only arm once a company is in a dip.
Momentum & 52-week range
RSI 52 · 5 days −7.7%
The business
FCF $2.4B · Sales +5%
- Free cash flow, 12 months$2.4B
- Free-cash-flow yield8.4%
- Free-cash-flow margin11%
- Gross margin33%
- Operating margin16%
- Return on invested capital17%
- Return on equity17%
- Sales growth (latest quarter vs year-ago quarter)+5%
- Net debt / EBITDA0.1×
Information only, not investment advice. Fair value estimates and talking points are rule-based model output from public data and can be wrong; stop levels are reference points, not orders. How every number is computed.
Get a text when CTSH fires a reversal signal
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