Cognizant Technology Solutions Corporation (CTSH) Valuation

Valuation

Model-based estimates, not advice. The DCF is the discounted-cash-flow value per share; compare it with the price, not as a target.

DCF fair value

+53.8%

$101.89

vs $66.24 price

Levered DCF

$93.51

After debt service

Piotroski score

6 / 9

Average

Altman Z-score

5.49

Safe zone

Rating

A+

Overall 4 / 5

Ratios by fiscal year

Margins and yields are shares of revenue, equity or price; multiples are ×.

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
P/E	18.2×	17.01×	17.94×	12.94×	21.85×	31.76×	18.79×	17.58×
P/B	2.66×	2.65×	2.88×	2.41×	3.9×	4.08×	3.15×	3.23×
P/S	1.89×	1.93×	1.97×	1.52×	2.53×	2.66×	2.07×	2.29×
EV / EBITDA	9.49×	10.59×	10.89×	8.04×	13.67×	16.17×	10.89×	11×
Gross margin	33.7%	34.3%	34.6%	35.9%	37.3%	35.9%	36.6%	39.0%
Operating margin	16.7%	14.7%	13.9%	15.3%	15.3%	12.7%	14.6%	17.4%
Net margin	10.6%	11.3%	11.0%	11.8%	11.5%	8.4%	11.0%	13.0%
Current ratio	2.34×	2.09×	2.25×	2.17×	2.08×	1.94×	2.55×	3.12×
Debt / equity	0.1×	0.1×	0.1×	0.12×	0.14×	0.16×	0.15×	0.07×
Interest coverage	95.38×	53.56×	65.59×	156.21×	314×	88.08×	94.35×	103.74×
Dividend yield	1.5%	1.6%	1.5%	1.9%	1.1%	1.1%	1.3%	1.3%
Payout ratio	27.4%	26.8%	27.8%	24.6%	23.8%	34.5%	24.6%	22.3%

Key metrics by fiscal year

Metric	FY2025	FY2024	FY2023	FY2022	FY2021	FY2020	FY2019	FY2018
Return on equity	14.9%	15.5%	16.1%	18.6%	17.8%	12.8%	16.7%	18.4%
Return on invested capital	12.3%	13.2%	13.3%	15.3%	14.7%	10.3%	13.5%	16.0%
Return on assets	10.8%	11.2%	11.5%	12.8%	12.0%	8.2%	11.4%	13.2%
Free cash flow yield	6.5%	4.8%	5.3%	7.5%	4.7%	6.6%	6.1%	6.0%
Earnings yield	5.6%	5.9%	5.6%	7.7%	4.6%	3.1%	5.3%	5.7%
Enterprise value	$39.6B	$37.4B	$36.8B	$29B	$46.6B	$43.3B	$33.7B	$36.5B
Net debt / EBITDA	-0.08×	-0.21×	-0.39×	-0.18×	-0.04×	-0.34×	-0.31×	-0.13×
Cash conversion cycle (days)	69	65	63	61	59	54	63	64