Cognizant Technology Valuation

CTSH Stock  USD 66.80  0.92  1.36%   
At this time, the firm appears to be undervalued. Cognizant Technology shows a prevailing Real Value of $71.03 per share. The current price of the firm is $66.8. Our model approximates the value of Cognizant Technology from analyzing the firm fundamentals such as Return On Equity of 0.16, profit margin of 0.11 %, and Current Valuation of 32.67 B as well as examining its technical indicators and probability of bankruptcy. In general, most investors favor purchasing undervalued instruments and trading away overvalued instruments since, at some point, asset prices and their ongoing real values will blend. Key fundamental drivers impacting Cognizant Technology's valuation include:
Price Book
2.6068
Enterprise Value
32.7 B
Enterprise Value Ebitda
9.8021
Price Sales
1.7817
Forward PE
15.0602
Undervalued
Today
66.80
Please note that Cognizant Technology's price fluctuation is very steady at this time. Calculation of the real value of Cognizant Technology is based on 3 months time horizon. Increasing Cognizant Technology's time horizon generally increases the accuracy of value calculation and significantly improves the predictive power of the methodology used.
Our valuation method for Cognizant Technology Solutions is useful when determining the fair value of the Cognizant stock, which is usually determined by what a typical buyer is willing to pay for full or partial control of Cognizant Technology. Since Cognizant Technology is currently traded on the exchange, buyers and sellers on that exchange determine the market value of Cognizant Stock. However, Cognizant Technology's intrinsic value may or may not be the same as its current market price, in which case there is an opportunity to profit from the mispricing, assuming the market price will eventually merge with its intrinsic value.
Historical Market  66.8 Real  71.03 Target  72.45 Hype  66.61
The real value of Cognizant Stock, also known as its intrinsic value, is the underlying worth of Cognizant Technology Company, which is reflected in its stock price. It is based on Cognizant Technology's financial performance, assets, liabilities, growth prospects, management team, or industry conditions. The intrinsic value of Cognizant Technology's stock can be calculated using various methods such as discounted cash flow analysis, price-to-earnings ratio, or price-to-book ratio. That value may differ from its current market price, which is determined by supply and demand factors such as investor sentiment, market trends, news, and other external factors that may influence Cognizant Technology's stock price. It is important to note that the real value of any stock may change over time based on changes in the company's performance.
71.03
Real Value
72.11
Upside
Estimating the potential upside or downside of Cognizant Technology Solutions helps investors to forecast how Cognizant stock's addition to their portfolios will impact the overall performance. We also use other valuation drivers to help us estimate the true value of Cognizant Technology more accurately as focusing exclusively on Cognizant Technology's fundamentals will not take into account other important factors:
Earnings
Estimates (0)
LowProjectedHigh
1.081.111.15
Details
Hype
Prediction
LowEstimatedHigh
65.5366.6167.69
Details
28 Analysts
Consensus
LowTarget PriceHigh
65.9372.4580.42
Details
Traditionally analysts and sophisticated investors use multiple methods for valuing a cash-flow-generating entity or its stock. For example, some money managers use Cognizant Technology's intrinsic value based on its ongoing forecasts of Cognizant Technology's financial statements. In contrast, other private, professional wealth advisors use a multiplier approach by looking to relative value analysis against Cognizant Technology's closest peers. When choosing an evaluation method for Cognizant Technology, ensure it is appropriate for the firm given its current financial situation and market classification. If more than one evaluation category is relevant, we suggest using both methods to arrive at a better estimate.

Cognizant Technology Investments

(548.15 Million)

Cognizant Valuation Trend

Knowing Cognizant Technology's actual value is paramount for traders to make sound investment determinations. Cognizant Technology's real value is not only important for the investor to make better decisions but also for a more accurate overall view of Cognizant Technology's financial worth over time since having this information enables investors and analysts to forecast the earnings more efficiently. Using both Cognizant Technology's enterprise value as well as its market capitalization is the best way to gauging the value of the company and is usually enough for investors to make market timing descisions.

Cognizant Market Cap

Cognizant Technology Solutions is number one stock in market capitalization category among related companies. Market capitalization of Information Technology industry is currently estimated at about 87 Billion. Cognizant Technology totals roughly 33.67 Billion in market capitalization claiming about 39% of equities under Information Technology industry.
Capitalization  Total debt  Workforce  Valuation  Revenue

Cognizant Technology Valuation Ratios as Compared to Competition

Comparative valuation techniques use various fundamental indicators to help in determining Cognizant Technology's current stock value. Our valuation model uses many indicators to compare Cognizant Technology value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Cognizant Technology competition to find correlations between indicators driving Cognizant Technology's intrinsic value. More Info.
Cognizant Technology Solutions is number one stock in price to earning category among related companies. It is number one stock in price to book category among related companies fabricating about  0.19  of Price To Book per Price To Earning. The ratio of Price To Earning to Price To Book for Cognizant Technology Solutions is roughly  5.21 . The current Price To Book Ratio is estimated to decrease to 2.74. Comparative valuation analysis is a catch-all model that can be used if you cannot value Cognizant Technology by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Cognizant Technology's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued. The reason why the comparable model can be used in almost all circumstances is due to the vast number of multiples that can be utilized, such as the price-to-earnings (P/E), price-to-book (P/B), price-to-sales (P/S), price-to-cash flow (P/CF), and many others. The P/E ratio is the most commonly used of these ratios because it focuses on the Cognizant Technology's earnings, one of the primary drivers of an investment's value.
Please note that valuation analysis is one of the essential comprehensive assessments in business. It evaluates Cognizant Technology's worth, which you can determine by considering its current assets, liabilities and future cash flows. The investors' valuation analysis is an important metric that will give you a perspective on different companies. It helps you know the worth of the potential investment in Cognizant Technology and how it compares across the competition.

About Cognizant Technology Valuation

The stock valuation mechanism determines the current worth of Cognizant Technology Solutions on a weekly basis. We use both absolute as well as relative valuation methodologies to arrive at the intrinsic value of Cognizant Technology Solutions. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Cognizant Technology based exclusively on its fundamental and basic technical indicators. By analyzing Cognizant Technology's financials, quarterly and monthly indicators, and its related drivers such as dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of Cognizant Technology's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Cognizant Technology. We calculate exposure to Cognizant Technology's market risk, different technical and fundamental indicators, relevant financial multiples and ratios, and then comparing them to Cognizant Technology's related companies.
Last ReportedProjected for Next Year
Gross Profit6.2 B3.2 B
Pretax Profit Margin 0.14  0.20 
Operating Profit Margin 0.15  0.18 
Net Profit Margin 0.11  0.15 
Gross Profit Margin 0.32  0.46 

Cognizant Technology Quarterly Retained Earnings

13.62 Billion

8 Steps to conduct Cognizant Technology's Valuation Analysis

Company's valuation is the process of determining the worth of any company in monetary terms. It estimates Cognizant Technology's potential worth based on factors such as financial performance, market conditions, growth prospects, and overall economic environment. The result of company valuation is a single number representing a Company's current market value. This value can be used as a benchmark for various financial transactions such as mergers and acquisitions, initial public offerings (IPOs), or private equity investments. To conduct Cognizant Technology's valuation analysis, follow these 8 steps:
  • Gather financial information: Obtain Cognizant Technology's financial statements, including balance sheets, income statements, and cash flow statements.
  • Determine Cognizant Technology's revenue streams: Identify Cognizant Technology's primary sources of revenue, including products or services offered, target markets, and pricing strategies.
  • Analyze market data: Research Cognizant Technology's industry and market trends, including the size of the market, growth rate, and competition.
  • Establish Cognizant Technology's growth potential: Evaluate Cognizant Technology's management, business model, and growth potential.
  • Determine Cognizant Technology's financial performance: Analyze its financial statements to assess its historical performance and future potential.
  • Choose a valuation method: Consider the Company's specific circumstances and choose an appropriate valuation method, such as the discounted cash flow (DCF) or comparable analysis method.
  • Calculate the value: Apply the chosen valuation method to the financial information and market data to calculate Cognizant Technology's estimated value.
  • Review and adjust: Review the results and make necessary adjustments, considering any relevant factors that may have been missed or overlooked.
Note: This is a general outline, and different approaches and methods may be used depending on the type and size of the company being valued. We also recomment to seek professional assistance to ensure accuracy.
Cognizant Technology's stock price is the clearest measure of market expectations about its performance. Without stock valuation, investors cannot independently discern whether Cognizant Technology's value is low or high relative to the company's performance and growth projections. Determining the market value of Cognizant Technology can be done in different ways, such as multiplying its stock price by its outstanding shares.
A single share of Cognizant Technology represents a small ownership stake in the entity. As a stockholder of Cognizant, your percentage of company ownership is determined by dividing the number of shares you own by the total number of shares outstanding and then multiplying that amount by 100. Owning stock in a company generally confers both corporate voting rights and income from any dividends paid to the stock owner.

Cognizant Technology Dividends Analysis For Valuation

The Cognizant Technology's current Dividend Paid And Capex Coverage Ratio is estimated to increase to 8.93, while Dividends Paid is forecasted to increase to (561.5 M). . As of now, Cognizant Technology's Retained Earnings are increasing as compared to previous years. The Cognizant Technology's current Price Earnings Ratio is estimated to increase to 33.68, while Retained Earnings Total Equity is projected to decrease to under 8.9 B.
Last ReportedProjected for Next Year
Dividends Paid-591 M-561.5 M
Dividend Yield 0.02  0.01 
Dividend Payout Ratio 0.28  0.20 
Dividend Paid And Capex Coverage Ratio 8.50  8.93 
There are various types of dividends Cognizant Technology can pay to its shareholders, and the actual value of the dividend is determined on a per-share basis. It is to be paid equally to all of Cognizant shareholders on a specific date, known as the payable date. The cash dividend is the most common type of dividend payment - it is the payment of actual cash from Cognizant Technology Solutions directly to its shareholders. There are other types of dividends that companies can issue, such as stock dividends or asset dividends. When Cognizant pays a dividend, it has no impact on its enterprise value. It does, however, lowers the Equity Value of Cognizant Technology by the value of the dividends paid out.

Cognizant Technology Growth Indicators

Growth stocks usually refer to those companies expected to grow sales and earnings faster than the market average. Growth stocks typically don't pay dividends, often look expensive, and usually trading at a high P/E ratio. Nevertheless, such valuations could be relatively cheap if the company continues to grow, which will drive the share price up. However, since most investors are paying a high price for a growth stock, based on expectations, if those expectations are not fully realized, growth stocks can see dramatic declines. Note, investing in growth stocks can be very risky. If the company such as Cognizant Technology does not do well, investors take a loss on the stock when it is time to sell. Also, because growth stocks typically do not pay dividends, the only opportunity an investor has to make money on their investment is when they eventually sell their shares.
Common Stock Shares Outstanding505 M
Quarterly Earnings Growth Y O Y-0.036
Forward Price Earnings15.0602

Cognizant Technology Current Valuation Indicators

Valuation refers to the process of determining the present value of Cognizant Technology Solutions and all of its assets. It can be calculated using a number of techniques. As many analysts who try to value Cognizant we look at many different elements of the entity such as Cognizant's management, its prospective future earnings, the current market value of the company's assets, as well as its capital structure formation. Cognizant Technology's valuation analysis is also a process of estimating the intrinsic value of all assets and outstanding equities. There are different methodologies and models we use to develop the final Cognizant Technology's valuation. The techniques such as discounted cash flow and fundamental indicators such as book value per share or market capitalization are well known and widely used across most financial advisers and money managers.
Valuations are an essential part of business, for companies themselves, but also for investors. For companies, such as Cognizant Technology, valuations can help measure their progress and success and can help them track their performance in the market compared to others. In addition, investors can use Cognizant Technology's valuations to help determine the worth of potential investments. They can do this by using data and information made public by a company. Regardless of who the valuation is for, it essentially describes Cognizant Technology's worth.
When determining whether Cognizant Technology offers a strong return on investment in its stock, a comprehensive analysis is essential. The process typically begins with a thorough review of Cognizant Technology's financial statements, including income statements, balance sheets, and cash flow statements, to assess its financial health. Key financial ratios are used to gauge profitability, efficiency, and growth potential of Cognizant Technology Solutions Stock. Outlined below are crucial reports that will aid in making a well-informed decision on Cognizant Technology Solutions Stock:
Check out Trending Equities to better understand how to build diversified portfolios, which includes a position in Cognizant Technology Solutions. Also, note that the market value of any company could be tightly coupled with the direction of predictive economic indicators such as signals in state.
You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Complementary Tools for Cognizant Stock analysis

When running Cognizant Technology's price analysis, check to measure Cognizant Technology's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Cognizant Technology is operating at the current time. Most of Cognizant Technology's value examination focuses on studying past and present price action to predict the probability of Cognizant Technology's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Cognizant Technology's price. Additionally, you may evaluate how the addition of Cognizant Technology to your portfolios can decrease your overall portfolio volatility.
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Is Cognizant Technology's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Cognizant Technology. If investors know Cognizant will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Cognizant Technology listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.04)
Dividend Share
1.18
Earnings Share
4.17
Revenue Per Share
38.448
Quarterly Revenue Growth
(0.01)
The market value of Cognizant Technology is measured differently than its book value, which is the value of Cognizant that is recorded on the company's balance sheet. Investors also form their own opinion of Cognizant Technology's value that differs from its market value or its book value, called intrinsic value, which is Cognizant Technology's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Cognizant Technology's market value can be influenced by many factors that don't directly affect Cognizant Technology's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Cognizant Technology's value and its price as these two are different measures arrived at by different means. Investors typically determine if Cognizant Technology is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Cognizant Technology's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.