As of May 16, 2026, Cognizant Technology Solutions Corp's estimated intrinsic value ranges from $53.70 to $93.78 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $93.78 | +99.0% |
| Discounted Cash Flow (5Y) | $80.31 | +70.4% |
| Dividend Discount Model (Multi-Stage) | $68.72 | +45.8% |
| Dividend Discount Model (Stable) | $53.70 | +13.9% |
| Earnings Power Value | $83.70 | +77.6% |
Is Cognizant Technology Solutions Corp (CTSH) undervalued or overvalued?
With the current market price at $47.13, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Cognizant Technology Solutions Corp's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.67 | 0.71 |
| Cost of equity | 6.9% | 8.9% |
| Cost of debt | 4.5% | 5.0% |
| Tax rate | 24.2% | 24.4% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 6.9% | 8.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $80 | $37,473M | 71.3% |
| 10-Year Growth | $94 | $43,913M | 53.3% |
| 5-Year EBITDA | $73 | $33,749M | 68.2% |
| 10-Year EBITDA | $88 | $41,026M | 50.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $3,001M |
| Discount Rate (WACC) | 8.7% - 6.9% |
| Enterprise Value | $34,373M - $43,812M |
| Net Debt | $(936)M |
| Equity Value | $35,309M - $44,748M |
| Outstanding Shares | 478M |
| Fair Value | $74 - $94 |
| Selected Fair Value | $83.70 |
| Metric | Value |
|---|---|
| Market Capitalization | $22540M |
| Enterprise Value | $21604M |
| Trailing P/E | 10.11 |
| Forward P/E | 8.08 |
| Trailing EV/EBITDA | 7.50 |
| Current Dividend Yield | 272.41% |
| Dividend Growth Rate (5Y) | 4.63% |
| Debt-to-Equity Ratio | 0.03 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $28.13 |
| Discounted Cash Flow (5Y) | 25% | $20.08 |
| Dividend Discount Model (Multi-Stage) | 20% | $13.74 |
| Dividend Discount Model (Stable) | 15% | $8.06 |
| Earnings Power Value | 10% | $8.37 |
| Weighted Average | 100% | $78.38 |
Based on our comprehensive valuation analysis, Cognizant Technology Solutions Corp's intrinsic value is $78.38, which is approximately 66.3% above the current market price of $47.13.
Key investment considerations:
Given these factors, we believe Cognizant Technology Solutions Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.