Cognizant Technology Solutions (CTSH) just announced a fresh partnership with SmartestEnergy, where it will provide advanced cybersecurity and managed detection services. This move comes as SmartestEnergy expands globally and seeks tighter digital protections.

Cognizant’s recent partnership news follows several notable milestones, including being named one of Forbes World's Best Employers for 2025. Still, momentum in the share price has faded this year, with a 1-year total shareholder return of -12.9% and a 3-year total return of 15.5%. While operational accolades remain strong, investor sentiment appears more cautious for now.

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With shares trading around 32 percent below consensus analyst targets and fundamentals showing steady, if unspectacular, growth, is Cognizant now undervalued? Or is the market simply anticipating slow future gains from here?

Most Popular Narrative: 24.3% Undervalued

Cognizant’s most followed valuation narrative estimates a fair value far above the last close of $65.80. This suggests the market could be overlooking growth levers and margin expansion opportunities. This framework sets up a forward-leaning debate about the company’s next chapter.

Client transition from experimentation to large-scale implementation of GenAI and automation projects is fueling a new wave of large, multi-year deal wins, especially in Financial Services and Health Sciences, indicating stronger long-term recurring revenue visibility and potential for sustained double-digit EPS growth.

How optimistic are analysts about Cognizant's digital transformation? Their calculations rely on bold assumptions for recurring revenues, higher margins, and an upward move in profit multiples. Find out what is fueling this target.

Result: Fair Value of $86.95 (UNDERVALUED)

However, heightened competition from tech giants and evolving client preferences for platform-based solutions could limit Cognizant’s traditional growth drivers in the future.

Build Your Own Cognizant Technology Solutions Narrative

If you see the story differently or want to dive deeper into the numbers, you can build and share your own view in just a few minutes. Do it your way.

A great starting point for your Cognizant Technology Solutions research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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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.