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    CTSH · NMS · Technology

    Cognizant Technology Solutions Corporation

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 91.24

    Market price

    USD 65.09

    Implied upside

    +40.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 91.24+40.2%
    Exit multiple
    USD 78.78+21.0%
    Market price
    USD 65.09

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn3bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 22.1bnUSD 23.0bnUSD 23.9bnUSD 24.7bnUSD 25.6bnUSD 26.4bnUSD 27.2bnUSD 28.0bnUSD 28.7bnUSD 29.4bn+3.2%
    EBITUSD 3.4bnUSD 3.5bnUSD 3.7bnUSD 3.8bnUSD 3.9bnUSD 4.1bnUSD 4.2bnUSD 4.3bnUSD 4.4bnUSD 4.5bn+3.2%
    NOPATUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bn+3.2%
    Add depreciation & amortisationUSD 616.1mUSD 640.6mUSD 664.8mUSD 688.8mUSD 712.3mUSD 735.4mUSD 757.8mUSD 779.6mUSD 800.5mUSD 820.5m+3.2%
    Less capital expenditureUSD -343.5mUSD -434.9mUSD -532.1mUSD -634.9mUSD -743.1mUSD -856.4mUSD -974.6mUSD -1.1bnUSD -1.2bnUSD -1.4bn+16.5%
    Capex, % of revenue1.6%1.9%2.2%2.6%2.9%3.2%3.6%3.9%4.3%4.6%-
    Less increase in working capitalUSD -184.3mUSD -162.4mUSD -161.0mUSD -159.0mUSD -156.3mUSD -153.0mUSD -148.9mUSD -144.2mUSD -138.9mUSD -132.8m-3.6%
    Free cashflow to firmUSD 2.8bnUSD 2.8bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bnUSD 2.9bn+0.5%
    Discount factor0.96020.88530.81620.75250.69380.63960.58970.54370.50130.4621-
    Present valueUSD 2.7bnUSD 2.5bnUSD 2.3bnUSD 2.2bnUSD 2.0bnUSD 1.9bnUSD 1.7bnUSD 1.6bnUSD 1.5bnUSD 1.3bn-
    Present Value Of The ForecastUSD 19.7bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.884Reported 0.827, pulled toward 1.0 (Blume)
    Cost of equity8.63%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 89.9x interest cover. Book interest / average debt was lower, at 2.8%.
    Market capitalisationUSD 29.1bn96.2% of capital
    Total debtUSD 1.2bn3.8% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.46%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 91.24

    55% of EV

    Forecast FCFF, final year
    USD 2.9bn
    Capex at depreciation, working capital in reinvestment
    USD 3.6bn
    Less reinvestment at g/ROIC (14.9% of NOPAT)
    USD -533.5m
    Capitalised
    USD 3.0bn
    ROIC (reported)
    16.7%
    Terminal value, undiscounted
    USD 52.2bn
    Terminal value, discounted
    USD 24.1bn
    Enterprise value
    USD 43.9bn
    Less net debt
    USD -762.0m
    Equity value
    USD 44.6bn

    Exit at 7.3x EBITDA

    Value per shareUSD 78.78

    48% of EV

    Terminal value, undiscounted
    USD 39.0bn
    Terminal value, discounted
    USD 18.0bn
    Enterprise value
    USD 37.8bn
    Less net debt
    USD -762.0m
    Equity value
    USD 38.5bn

    Spread between methods: 15%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.46%121.69127.09133.99143.04155.32
    7.46%101.93104.79108.32112.76118.45
    8.46%87.8589.3791.2493.5396.38
    9.46%77.3178.0979.0480.2281.67
    10.46%69.1269.4669.9070.4571.15

    Outlined: this model. Green text: above today's price of 65.09. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year2.8%3.4%-1.3%
    EBIT margin15.8%15.4%10.9%
    Discount rate-8.5%11.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.