Valuation snapshot and recent share performance

Cognizant Technology Solutions (CTSH) has drawn fresh attention as investors reassess large IT services firms, with the stock recently closing at $76.84 and showing mixed returns over the past year.

Over the past month, the share price shows a 9.19% decline, while the past 3 months reflect a 4.97% gain. The stock is also down 5.46% year to date and 10.34% over the past year. This performance is set against a 5.07% annual revenue growth rate and 9.34% annual net income growth.

Recent trading points to fading momentum in the short term, with a 7 day share price return of 6.8% and a 30 day share price return of 9.19%, even though the 3 year total shareholder return of 21.16% and 5 year total shareholder return of 7.86% still show a positive longer run outcome for investors.

If Cognizant’s mixed performance has you reassessing your watchlist, this could be a good moment to widen your search with our screener of 33 AI infrastructure stocks.

So with Cognizant trading at $76.84, a value score of 5, and a quoted 41.26% intrinsic discount, should you see this as a genuine mispricing, or has the market already factored in its future growth?

Most Popular Narrative: 15.9% Undervalued

The most followed narrative on Cognizant sees a fair value of $91.40 against the last close at $76.84, framing the current share price as meaningfully below that estimate and rooted in detailed views on growth, margins and cash flows using an 8.96% discount rate.

The accelerating shift toward digital transformation, particularly cloud migration, agentic automation, and AI-driven process redesign, is expanding Cognizant's total addressable market as enterprises seek partners for end-to-end modernization, supporting both top-line revenue growth and gross margin expansion.

Curious how this story gets to that higher value? Earnings, margins and future deal wins sit at the core of the math. Want the full picture?

Result: Fair Value of $91.40 (UNDERVALUED)

However, this hinges on AI driven growth and healthier bookings not stalling, and on rising competition and regulation not compressing Cognizant’s margins or deal economics.

Build Your Own Cognizant Technology Solutions Narrative

If this undervaluation story does not quite fit your view, or you would rather rely on your own work, you can build and test your version of Cognizant’s narrative in just a few minutes by starting with Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Cognizant Technology Solutions.

Looking for more investment ideas?

If Cognizant has sharpened your thinking, do not stop here. Use these focused stock ideas to pressure test your portfolio and spot opportunities others might overlook.

• Target value opportunities by scanning our list of 55 high quality undervalued stocks that pair quality fundamentals with prices that sit below our fair value estimates.
• Prioritise resilience by reviewing 81 resilient stocks with low risk scores designed to highlight companies with lower risk scores for more defensive positioning.
• Get ahead of the crowd by checking our screener containing 25 high quality undiscovered gems where strong fundamentals have yet to attract broad market attention.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.