Cognizant Technology Solutions Corporation (CTSH) DCF Valuation
Transparent DCF models put Cognizant Technology Solutions Corporation (CTSH)'s fair value in a range of $76.58 – $115.57 — the low end is TGM's conservative base case (5% FCF growth, 10% discount), the high end the analyst consensus (FMP). Today's price of $52.94 sits below that range — by these conservative assumptions it screens as potentially undervalued.
Reverse DCF: at today's $52.94, the market is pricing in roughly -0.2%/yr free-cash-flow growth over the next decade (at a 10% required return) — versus its actual 5-year FCF CAGR of -1.1%, roughly in line with its track record.
Current Price
$52.94
Fair-Value Range
$76.58 – $115.57
Market-Implied Growth
-0.2%/yr
vs -1.1% 5Y actual
CTSH DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Illustrative model — not investment advice. Defaults to a conservative base case; the analyst (FMP) DCF, where available, is shown as a reference below.
Base inputs: FCF $2.2B · 0.47B shares · net cash $749.0M
Estimated Fair Value
$76.58
+44.7% vs $52.94
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 5.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $52.94; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.0% | $94.79 | $99.56 | $105 | $112 | $120 |
| 9.0% | $81.64 | $84.90 | $88.67 | $93.07 | $98.27 |
| 10.0% | $71.62 | $73.95 | $76.58 | $79.59 | $83.06 |
| 11.0% | $63.75 | $65.45 | $67.36 | $69.50 | $71.93 |
| 12.0% | $57.40 | $58.68 | $60.10 | $61.67 | $63.43 |
About Cognizant Technology Solutions Corporation
Cognizant Technology Solutions Corporation functions as a global professional services firm, delivering a comprehensive suite of consulting, technology, and outsourcing solutions across North America, Europe, and other international markets. Its operations are structured into four primary divisions: Financial Services, Healthcare, Products and Resources, and Communications, Media and Technology. Within the Financial Services sector, Cognizant provides advanced services such as enhancing customer experiences, implementing robotic process automation (RPA), and leveraging analytics and artificial intelligence (AI) to address needs in areas like digital lending, fraud prevention, and modern payment systems. For its Healthcare clients, the company focuses on navigating industry shifts toward consumer-centric models, outcome-based agreements, and digital health initiatives, striving to deliver an integrated, seamless, and patient-focused omnichannel experience. Furthermore, Cognizant assists in optimizing operations across various functions, including clinical development, pharmacovigilance, manufacturing, claims management, enrollment procedures, membership administration, and billing processes. Its clientele in this domain spans healthcare providers, payers, and life sciences organizations, encompassing pharmaceutical, biotechnology, and medical device firms. In the Products and Resources segment, the company develops solutions tailored for manufacturers, retailers, and entities within the travel and hospitality sectors, alongside those engaged in logistics, energy, and utility services. Within the Communications, Media and Technology division, Cognizant supports businesses in creating digital content, crafting personalized user experiences, and expediting digital engineering efforts. This includes serving information, media, entertainment, communications, and technology enterprises. Established in 1994, the company maintains its primary corporate office in Teaneck, New Jersey.
- Sector
- Technology
- Industry
- Information Technology Services
- CEO
- Ravi Kumar Singisetti