CTSH
Cognizant Technology Solutions Corporation
$66.03
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 3.3% below fair value
You pay
$66.03
Bear
$54.60
Fair
$68.25
Bull
$81.90
Bear
$54.60
-17.3%
$4.55 × 12x P/E
Fair
$68.25
+3.4%
$4.55 × 15x P/E
Bull
$81.90
+24.0%
$4.55 × 18x P/E
Adjust Assumptions
15.0x
4.55$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
14.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (51 analysts)
$64.25
Divergence from AlphaVal
6%
Summary
Applying a 15x P/E to adjusted EPS of $4.55, the base-case value is $68.25 per share. DDM cross-check: $37.31.
Warnings
Dividend-based valuation: $37.31 (below our primary estimate by 45%). 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