Is Cognizant Technology Solutions Corporation (CTSH) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $63.60, Cognizant Technology Solutions Corporation (CTSH) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $46.85 and $148.60 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Cognizant Technology Solutions Corporation's projected free cash flows at a weighted-average cost of capital (WACC) of 9.2%, with a long-run terminal growth rate of 2.5%. About 74% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, CTSH's modeled DCF value ranges from about $65.99 to $137.34 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Cognizant Technology Solutions Corporation would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of CTSH's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind CTSH's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $21,108,000,000 | Cognizant FY2025 10-K (accession 0001058290-26-000008, filed 2026-02-12): us-gaap:Revenues FY2025 = $21,108M, +7.0% on FY2024's $19,736M (+6.4% constant currency), of which the Belcan acquisition (closed Aug-2024) contributed ~2.6 points (Q4/FY2025 release), so organic growth was ~3.8%. Calendar fiscal year, 10-K filed 2026-02-12, so FY2025 is the latest completed year and FY2026 is Year 1. CROSS-CHECK: H1 2026 revenue $10,894M, +5.2% (+4.0% cc) on H1 2025's $10,360M (Q2 2026 release); the H1 figure includes ~0.9pt from the 3Cloud/Astreya acquisitions and ~1.6pt from low-margin third-party product resale. |
| Base EBIT margin | 16.1% | Cognizant FY2025 10-K (accession 0001058290-26-000008, filed 2026-02-12): GAAP income from operations $3,389M / $21,108M = 16.06% (us-gaap:OperatingIncomeLoss). It INCLUDES a one-off $62M gain on selling an office complex in India (0.3pt); Cognizant's adjusted margin excluding it was 15.8%. Not used by the engine beyond the cyclical check; the forecast starts from the 2026 guide. CROSS-CHECK: H1 2026 GAAP $1,717M / $10,894M = 15.8%, which nets $84M of Project Leap restructuring against an $81M one-off India provident-fund reversal; adjusted H1 15.8% vs 15.5% a year earlier. |
| Forecast revenue growth | 5% → 4% → 3% → 3% → 3% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every researched model in this tracker. |
| Beta | 0.85 | Yahoo Finance / yfinance published 5Y-monthly beta: Published 5Y-monthly beta 0.851, used AS IS (rounded to 0.85) - no normalization, consistent with the ACN model which also held its published figure. Recomputed independently from 59 monthly returns vs the S&P 500: 0.86, so the figure is not a feed error. CAVEAT, and it points one way: the 2026 regime - a 52-week range of $37.08-$87.03, a ~10% one-day fall on 2026-06-18 in sympathy with Accenture, and Nasdaq-100 removal effective 2026-06-22 - is a handful of points in a 60-month regression. The 2-year WEEKLY beta is 0.96. Using 1.0 would lower the value by ~$8.60/share; this is the single largest discount-side judgement and it is flagged in the explainer. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability with every other company in this tracker, and consistent with the organic-only forecast. Not obviously generous for a firm that grew organically ~3-4% in 2025-26, but this is exactly the input GenAI puts in question: if AI permanently shrinks the billable-hours pool, perpetual growth could be below zero - and the reverse DCF shows that is what today's price implies. 2.0% takes ~$4.90/share off; 3.0% adds ~$5.70. Must stay well below the ~9.2% WACC; it does. |
| Diluted shares | 466M | Cognizant Q2 2026 earnings release, 8-K Ex-99.1 (accession 0001058290-26-000030, filed 2026-07-29): Q2 2026 weighted-average diluted shares 466M (Cognizant reports in whole millions; H1 2026 472M, FY2025 489M). CONSERVATIVE, and by a known amount: Cognizant bought back 22.5M shares for $1,153M during Q2 (including a $500M ASR completed in the quarter), so the period-end count was 452M and yfinance shows ~450.4M outstanding now. The cash spent on those buybacks is already out of the June-30 net debt, so using the weighted count charges for some of them twice; 452M would add ~$2.70/share. The house rule (latest quarter's weighted diluted count) is kept. SBC dilution is small (~$180-200M a year) and is overwhelmed by buybacks - the count fell from 528M (FY2021) to 466M. |
| Market price | $63.60 | Delayed quote · as of 2026-11-10 05:03 UTC |
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Most undervalued stocks (per our valuation) · Undervalued Technology stocks · All valued stocks · Interactive CTSH valuation & downloadable modelTickerWorth is an educational DCF tool, not a licensed investment adviser. Figures are estimates derived from public filings and market data and can be wrong.