CTSH Valuation

Cognizant Technology Solutions Corp

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71.820

+0.04(0.056%)1D

Overview
Forecast
Valuation
Earnings

CTSH Relative Valuation

CTSH's fair value is calculated using relative valuation, based on historical P/E and P/S ranges and their premiums/discounts relative to a competitor average, adjusted by weights. If the market price exceeds this fair value range, CTSH is overvalued; if below, it's undervalued.

Historical Valuation

Cognizant Technology Solutions Corp (CTSH) is now in the Undervalued zone, suggesting that its current forward PE ratio of 13.61 is considered Undervalued compared with the five-year average of 16.34. The fair price of Cognizant Technology Solutions Corp (CTSH) is between 77.90 to 95.91 according to relative valuation methord. Compared to the current price of 71.78 USD , Cognizant Technology Solutions Corp is Undervalued By 7.86%.

Relative Value

Fair Zone

77.90-95.91

Current Price：71.78

7.86%

Undervalued

13.61

Trailing

Forward

8.84

EV/EBITDA

Cognizant Technology Solutions Corp. (CTSH) has a current EV/EBITDA of 8.84. The 5-year average EV/EBITDA is 10.31. The thresholds are as follows: Strongly Undervalued below 7.76, Undervalued between 7.76 and 9.04, Fairly Valued between 11.59 and 9.04, Overvalued between 11.59 and 12.87, and Strongly Overvalued above 12.87. The current Forward EV/EBITDA of 8.84 falls within the Undervalued range.

10.28

EV/EBIT

Cognizant Technology Solutions Corp. (CTSH) has a current EV/EBIT of 10.28. The 5-year average EV/EBIT is 12.25. The thresholds are as follows: Strongly Undervalued below 9.07, Undervalued between 9.07 and 10.66, Fairly Valued between 13.84 and 10.66, Overvalued between 13.84 and 15.44, and Strongly Overvalued above 15.44. The current Forward EV/EBIT of 10.28 falls within the Undervalued range.

1.65

Cognizant Technology Solutions Corp. (CTSH) has a current PS of 1.65. The 5-year average PS is 1.91. The thresholds are as follows: Strongly Undervalued below 1.40, Undervalued between 1.40 and 1.65, Fairly Valued between 2.17 and 1.65, Overvalued between 2.17 and 2.43, and Strongly Overvalued above 2.43. The current Forward PS of 1.65 falls within the Undervalued range.

11.56

P/OCF

Cognizant Technology Solutions Corp. (CTSH) has a current P/OCF of 11.56. The 5-year average P/OCF is 13.54. The thresholds are as follows: Strongly Undervalued below 9.94, Undervalued between 9.94 and 11.74, Fairly Valued between 15.34 and 11.74, Overvalued between 15.34 and 17.14, and Strongly Overvalued above 17.14. The current Forward P/OCF of 11.56 falls within the Undervalued range.

12.96

P/FCF

Cognizant Technology Solutions Corp. (CTSH) has a current P/FCF of 12.96. The 5-year average P/FCF is 16.87. The thresholds are as follows: Strongly Undervalued below 11.98, Undervalued between 11.98 and 14.42, Fairly Valued between 19.32 and 14.42, Overvalued between 19.32 and 21.76, and Strongly Overvalued above 21.76. The current Forward P/FCF of 12.96 falls within the Undervalued range.

Cognizant Technology Solutions Corp (CTSH) has a current Price-to-Book (P/B) ratio of 2.30. Compared to its 3-year average P/B ratio of 2.63 , the current P/B ratio is approximately -12.61% higher. Relative to its 5-year average P/B ratio of 3.00, the current P/B ratio is about -23.40% higher. Cognizant Technology Solutions Corp (CTSH) has a Forward Free Cash Flow (FCF) yield of approximately 6.47%. Compared to its 3-year average FCF yield of 5.82%, the current FCF yield is approximately 11.12% lower. Relative to its 5-year average FCF yield of 5.97% , the current FCF yield is about 8.38% lower.

2.30

P/B

Median3y

2.63

Median5y

3.00

6.47

FCF Yield

Median3y

5.82

Median5y

5.97

Competitors Valuation Multiple

The average P/S ratio for CTSH's competitors is 2.38, providing a benchmark for relative valuation. Cognizant Technology Solutions Corp Corp (CTSH) exhibits a P/S ratio of 1.65, which is -30.93% above the industry average. Given its robust revenue growth of 8.14%, this premium appears unsustainable.

P/S

P/E

EV/EBITDA

EV/EBIT

P/S

Revenue Growth

Market Cap

CTSH.O

Cognizant Technology Solutions Corp

Broadridge Financial Solutions Inc

SS&C Technologies Holdings Inc

3.39

5.88%

21.29B

Performance Decomposition

Market capitalization of CTSH decreased by 6.63% over the past 1 year. The primary factor behind the change was an increase in Revenue Growth from 4.85B to 5.25B.

The secondary factor is the Margin Expansion, contributed 5.40%to the performance.

Overall, the performance of CTSH in the past 1 year is driven by Revenue Growth. Which is more sustainable.

8.14%

4.85B → 5.25B

Revenue Growth

5.40%

11.67 → 12.30

Margin Expansion

-20.17%

18.13 → 14.48

P/E Change

-6.63%