Stock analysis · Bull Rankings model

CTSH analysis

Cognizant Technology Solutions CorporationInformation Technology Services. Scored on the same transparent model behind the daily rankings.

CTSH
Cognizant Technology Solutions Corporation · Information Technology Services
FCF$2.5bB
Rev+6.5%C+
D/E0.14B+
P/E13.3xA
PEG0.97B+
76.8Score
$61.87$27.9B
1Y Target$63.94Analyst consensus · 25 analysts
5Y Target$80.73Compound horizon
10Y Target$103.53Long-dated conviction
FCF$2.5bTTM
B
FCF $2.5b — solid, comfortably covers operations and capital return
Rev+6.5%TTM YoY
C+
Revenue +6.5% — steady but below market-beating range
D/E0.14
B+
D/E 0.14 — below the Technology debt median (≈40th pctile)
P/E13.3x
A
P/E 13.3 — cheapest decile in Technology (≈10th pctile)
PEG0.97
B+
PEG 0.97 — near fair value, classic Lynch benchmark (1.0)

Forward price target — the 1-year figure is the analyst consensus where the stock is covered; the 5- and 10-year figures compound our earnings estimate from there. The DCF below is a separate cross-check on intrinsic value (what it's worth today), not another target.

Quality-growth score · 76.8
Quality80.6
Growth69.6
Value80.7
Why this score
  • Buying back stock
  • Raising its dividend
  • Durable high returns
Entry · Margin of safety
52-week rangeMid-range
29% off the 12-month high
vs DCF fair value44% belowest. fair value ~$111
What the price assumes: free cash flow compounding at ~-7% a year for the next decade — vs the ~10% a year our model projects from current growth and analyst estimates.
Quality signals · context only
ROIC17.1% · A-return on invested capital — not score-weighted

Model-generatedGenerated by the Bull Rankings model from this company's reported fundamentals, and checked against the figures shown above.

Why now
Cognizant’s AI‑led automation platform in its Financial Services segment is now the engine of growth, delivering $2.5B of free cash flow on a $27.7B market cap while revenue climbs 6.5% YoY. The Bull Rankings model rates its Quality at 81 – the strongest pillar – underscoring the durability of its high‑margin consulting contracts, and a modest PE of 12.6x signals ample upside. The thesis rests on the compounding of AI‑driven services that can repeatedly upscale within the same client base.
Moat
The AI‑led automation and systems‑integration suite creates deep switching costs for large banks and insurers, the core of the Financial Services segment, allowing Cognizant to command a 14.8% ROE through pricing power and repeatable contracts. Its global delivery network across North America, Europe and Asia further entrenches relationships that rivals cannot replicate quickly.
Risk
The reverse‑DCF shows the current price embeds a -7% annual free‑cash‑flow growth rate for a decade, far below the actual 6.5% revenue growth and suggests the market is betting on a severe slowdown; any failure to accelerate AI services would validate that pessimism. A modest PE of 12.6x leaves little margin for error, and a slowdown in the Financial Services spend cycle would crush margins. A breach of the implied negative growth trajectory would trigger a sell‑off.
Horizon
1-3 yr $63.94 (25-analyst consensus) — multiple re-rating thesis requires a catalyst. 5 yr $80.73 at ~5% CAGR — dividend + buyback compounding. 10 yr $103.53 if the moat survives secular pressure.
Not investment advice. The Bull Rankings publishes a quantitative ranking model and accompanying analysis for general informational purposes only. Nothing on this page is a recommendation to buy, sell, or hold any security; nothing is personalized to your circumstances, risk tolerance, or tax situation. Investing carries the risk of loss — invest at your own risk and consider consulting a licensed financial professional before acting on anything you read here. See terms and methodology for full disclosures.

CTSH vs the Top Picks average

PillarCTSHBook avgDiff
Quality0.810.84-0.03
Growth0.700.84-0.14
Value0.810.78+0.02

Averaged across the 30 names in today's Top Picks (mean score 81.5). A name can beat these averages and still be absent from the book — it also applies concentration limits.

Trend
-3.2 over 46 daily scores
From 80.0 (Jun 22) → 76.8 (now)

One point per daily model run. The range autoscales, so a flat-looking line can still hide 1–2 point moves — read the From → To values for the actual range.

Analyst estimate revisions

30-day change+2.1%
90-day change+2.5%
Forward EPS estimate$6.31

Over the last 90 days, what analysts expect CTSH to earn is drifting higher (+2.5%). The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

A rising estimate means expectations are improving, not that the price has failed to keep up — and estimates get cut as readily as they get raised. It is not part of the Bull Rankings score. Biggest movers across the market →

Shares to buy
32
Position size
$1,980
4.0% of portfolio
Stop price
$46.40
25% below $61.87
$ at risk if stopped
$494.96
budget $500.00 · 1% of portfolio

Math only — share count is floor(portfolio × risk% ÷ (price × stop%)). Doesn't account for commissions, slippage, gap risk, or position-correlation across your book. Inputs persist locally; never sent to the server. Not investment advice.

Latest CTSH developments

Recent headlines from across the financial press · updated daily. Links open the source.

Cognizant Technology Solutions Corporation (CTSH): score, valuation & FAQ

Cognizant Technology Solutions Corporation (CTSH) is a Information Technology Services company that scores 76.8 out of 100 on the Bull Rankings quality-growth model — a solid, above-average reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are P/E (A), D/E (B+) and PEG (B+). On valuation, CTSH sits about 44% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly -7% annual free-cash-flow growth over the next decade.

Is CTSH a good stock to buy?

Bull Rankings scores CTSH 76.8 out of 100 on its quality-growth model, which is a solid, above-average reading. That is driven by P/E (A), D/E (B+) and PEG (B+). A score is a quantitative screen of Cognizant Technology Solutions Corporation's fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does CTSH score 76.8 on Bull Rankings?

The quality-growth score blends three pillars — quality (returns on capital, margins, leverage, earnings quality), growth (revenue and earnings expansion), and value (valuation versus sector peers). CTSH earns its highest marks on P/E (A), D/E (B+) and PEG (B+). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.

Is CTSH overvalued or undervalued?

Based on $61.87, CTSH sits about 44% below our discounted-cash-flow fair value (a margin of safety) — the current price implies roughly -7% annual free-cash-flow growth over the next decade. It trades at a 13.3x P/E (graded A). Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in CTSH?

The reverse‑DCF shows the current price embeds a -7% annual free‑cash‑flow growth rate for a decade, far below the actual 6.5% revenue growth and suggests the market is betting on a severe slowdown; any failure to accelerate AI services would validate that pessimism. A modest PE of 12.6x leaves little margin for error, and a slowdown in the Financial Services spend cycle would crush margins. A breach of the implied negative growth trajectory would trigger a sell‑off.

New to these metrics? The guides explain free cash flow, how the score works, and more in the learn hub — or run another name through the screener.

Bull Rankings is an automated fundamentals screen for research and education. It is not investment advice, and nothing here is a recommendation to buy or sell any security. Do your own research and consider consulting a licensed financial advisor.

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