CTSH
Cognizant Technology Solutions Corporation
$52.75
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 29.4% below fair value
You pay
$52.75
Bear
$59.79
Fair
$74.72
Bull
$89.67
Bear
$59.79
+13.3%
$4.73 × 12x P/E
Fair
$74.72
+41.7%
$4.73 × 15x P/E
Bull
$89.67
+70.0%
$4.73 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
11.2x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $81.75 from 51 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $74.72 per share.
Warnings
Dividend-based valuation: $39.93 (below our primary estimate by 44%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples