Cognizant Technology Solutions Corporation — Information Technology Services. Scored on the same transparent 7-signal model behind the daily rankings.
★
CTSH
Cognizant Technology Solutions Corporation · Information Technology Services
FCF$2.5bB
Rev+7.0%C+
D/E0.07B+
P/E9.2xA
PEG0.68A-
80.4Score
$43.40$20.5B
1Y Target$67.14Analyst consensus · 25 analysts
5Y Target$84.77Compound horizon
10Y Target$108.71Long-dated conviction
FCF$2.5bTTMB
FCF $2.5b — solid, comfortably covers operations and capital return
Rev+7.0%TTM YoYC+
Revenue +7.0% — steady but below market-beating range
D/E0.07B+
D/E 0.07 — below the Technology debt median (≈40th pctile)
P/E9.2xA
P/E 9.2 — cheapest decile in Technology (≈10th pctile)
PEG0.68A-
PEG 0.68 — strong; Lynch's preferred zone
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 · 80.4
Quality0.82
Growth0.70
Value0.90
Why this score
Buying back stock
Durable high returns
Entry · Margin of safety
52-week rangeNear 52-week low
50% off the 12-month high
vs DCF fair value56% belowest. fair value ~$98
Quality signals · context only
ROIC17.1% · A-return on invested capital — not score-weighted
Why now
Cognizant Technology Solutions is a compelling growth story trading at a deep discount, with its robust professional services in AI and technology solutions driving significant free cash flow. Despite a healthy 7% FY YoY revenue growth, the market values CTSH at an absurdly low 9.5x P/E and a 0.69 PEG ratio, suggesting substantial undervaluation for a company generating $2.5 billion in free cash flow. The crux of the thesis is the persistent demand for its comprehensive consulting, application development, and AI-led automation services across its Financial Services and Health Sciences segments, which will continue to compound earnings.
Moat
Cognizant's moat is built on the mission-critical nature and deep integration of its professional services, particularly in complex areas like systems integration, quality engineering, and AI-led automation. Clients in Financial Services and Health Sciences face high switching costs once Cognizant's teams are embedded in their core application development and infrastructure, ensuring recurring revenue and long-term engagements. This deep operational entanglement, combined with its comprehensive suite of consulting and outsourcing services, makes it incredibly difficult for competitors to displace.
Risk
The bear case centers on Cognizant's ability to maintain growth momentum in a highly competitive and evolving IT services landscape, especially given its relatively modest 7% FY YoY revenue growth. Despite its comprehensive offerings in AI and automation, intense competition could lead to pricing pressure, eroding the 10.4% profit margin and preventing the stock from recovering from its current $43.94 price, which is significantly down from its $87.03 52-week high. A sustained decline in demand for its core consulting and application development services, evidenced by further revenue deceleration, would confirm the bear's skepticism.
Horizon
1-3 yr $67.14 (25-analyst consensus) — multiple re-rating thesis requires a catalyst. 5 yr $84.77 at ~14% CAGR — dividend + buyback compounding. 10 yr $108.71 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.
Position sizing · CTSH
$
%
%
Shares to buy
46
Position size
$1,996
4.0% of portfolio
Stop price
$32.55
25% below $43.40
$ at risk if stopped
$499.10
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.
Cognizant Technology Solutions Corporation (CTSH) is a Information Technology Services company that scores 80.4 out of 100 on the Bull Rankings quality-growth model — a strong 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), PEG (A-) and D/E (B+). On valuation, CTSH sits about 56% below our discounted-cash-flow fair value (a margin of safety).
Is CTSH a good stock to buy?
Bull Rankings scores CTSH 80.4 out of 100 on its quality-growth model, which is a strong reading. That is driven by P/E (A), PEG (A-) and D/E (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 80.4 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), PEG (A-) and D/E (B+). Each pillar is graded against sector-aware thresholds, then combined into the single 0–100 score.
Is CTSH overvalued or undervalued?
Based on $43.40, CTSH sits about 56% below our discounted-cash-flow fair value (a margin of safety). It trades at a 9.2x× 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 bear case centers on Cognizant's ability to maintain growth momentum in a highly competitive and evolving IT services landscape, especially given its relatively modest 7% FY YoY revenue growth. Despite its comprehensive offerings in AI and automation, intense competition could lead to pricing pressure, eroding the 10.4% profit margin and preventing the stock from recovering from its current $43.94 price, which is significantly down from its $87.03 52-week high. A sustained decline in demand for its core consulting and application development services, evidenced by further revenue deceleration, would confirm the bear's skepticism.
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 adviser.