CTSH
Cognizant Technology Solutions Corporation$64.43
Buy
Target $92.73
Report: Mar 07, 2026Technology • Information Technology Services • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$64.43+43.9%
Rec: BuyConviction: High
Entry Target
$64.43
(0% above current)
Fair Value
$92.73
(44% above current)
Stop Loss
$56.45
(12% below current)
Position Size
Full
Time Horizon
Long-Term
Key Metrics
Live Snapshot
Market Data
52 Week High$87.03
52 Week Low$58.84
Avg. 3 Month Volume6.53M
Efficiency
LTM Gross Margin33.7%
LTM EBITDA Margin19.3%
LTM EBIT Margin16.7%
LTM Operating Margin16.1%
LTM ROA11.0%
LTM ROE14.8%
LTM ROIC47.5%
LTM ROCE21.1%
Capital Structure
Market Cap (MM)$29.3B
Enterprise Value (MM)$28.6B
Shares Outstanding479.00M
Total Debt (MM)$1.15B
Cash & Equivalents (MM)$1.90B
LTM Net Debt (MM)$-749.00M
LTM Net Debt/EBITDA-0.2x
Growth
TTM Rev. Growth7.0%
Last 3-Yr Rev. CAGR2.8%
Last 3-Yr EBITDA CAGR4.1%
Last 3-Yr EPS CAGR1.0%
Valuation
Street Target Price$91.00
LTM EV/Revenue1.4x
LTM EV/Gross Profit4.0x
LTM EV/EBIT8.1x
LTM EV/EBITDA7.0x
LTM P/E13.2x
LTM EV/FCF10.7x
LTM P/FCF11.0x
LTM P/TB2.4x
LTM P/B2.0x
Dividend Yield2.0%
Payout Ratio27.2%
Executive SummarySituation: Current price is $64.43 versus fair value $92.73 (43.9% expected return), and valuation confidence is stable. Debate: Bull case depends on Execution of the $1B share repurchase program in 2026. Bear case centers on Moat erosion from AI commoditization. Conclusion: Recommendation is Buy with Full sizing and Long-Term horizon.
Bull Case
Cognizant's AI-builder strategy is driving a surge in large-deal bookings, with TTM bookings reaching $27.5B and a book-to-bill ratio of 1.3x. Furthermore, the company's aggressive $3.1B share repurchase program and 6.3% net yield provide a powerful tailwind for EPS growth even in a moderate macro environment.
Bear Case
The primary bear concern is margin erosion, as gross margins fell 60 basis points to 33.7% in 2025 due to the Belcan integration and higher variable compensation. Additionally, the Anthropic risk suggests that automated coding platforms could cannibalize traditional IT services revenue, leading to structural pricing pressure.
Key Catalysts
Near-Term (0-6 months)Impact: High
Execution of the $1B share repurchase program in 2026. This addresses market skepticism by utilizing the fortress balance sheet to drive per...
Mid-Term (6-18 months)Impact: Critical
Sustained operating margin expansion toward the 16.1% target. Validating the ability to offset Belcan dilution and variable compensation thr...
Long-Term (18+ months)Impact: Moderate
Cognizant is relevant now because it is trading near its 52-week low of $60.04 despite reporting 7.0% revenue growth and a record $27.5B in...
Primary Risks
Concern: Medium
Moat erosion from AI commoditization. If agentic AI tools allow clients to automate IT services without third-party providers, Cognizant's p...
Concern: High
Regulatory and geopolitical risk. Potential U.S. anti-outsourcing legislation, such as the HIRE Act, could impose a 25% tax on foreign servi...
Concern: Medium
The governance outcome tree suggests three paths: 1. Status Quo: Management continues to execute the AI-builder strategy, leading to a slow...
Recent Activity
2026-02-26SEC Filing (8-K)
+5.94%Balu Ganesh Ayyar transitioned from President - Intuitive Operations and Automation and Industry Solutions to President – Asia Pacific & Japan and Industry Solutions Group.
2026-02-12Analyst Target
-7.16%Firm: BMO Capital Price Target: $83.00 Price When Posted: $69.56 Implied Upside: +19.3%
2025-10-29SEC Filing (8-K)
+5.71%Cognizant reports Q3 2025 results with revenue of $5.42 billion and increased guidance
2023-08-03SEC Filing (8-K)
+7.85%Cognizant reports Q2 2023 results with revenue of $4.9 billion and CFO retirement announcement
2023-05-04SEC Filing (8-K)
+6.76%Cognizant reports Q1 2023 results with revenue of $4.8 billion and initiates NextGen program
Valuation Table
9.8/10Decision Grade
Scenario Range
$75
Bear
$92
Base
$106
Bull
$64