US Equities Analysis

CTSH — Cognizant

Research evidence pack

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 15.57%
Profit Margins 10.41%
Return on Equity 14.88%
Return on Assets 10.44%
Free Float 0.47B
Dividend Yield 3.30%
Short Int % Utilisation 12.74%

2.2 Growth

Metric Value
Revenue Growth 5.8%
Free Cash Flow 1.91B
EBITDA 6.2 (Ratio)
Enterprise Value 24.13B
EV/Revenue 1.13
EV/EBITDA 6.2

Revenue growth of 5.8% indicates steady, moderate expansion.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* -7.40%
Risk / Std Dev (Ann.)* 39.54%
1-Year Price Return* -14.24%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $58.79
52-Week Range $37.08 – $87.03
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $21.11B
Prior annual revenue $19.74B
EBIT $3.52B
Tax rate 36.16%
NOPAT = EBIT × (1 − tax rate) $2.24B
Forecast start-growth basis 6.95%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $2.24B
Add: depreciation & amortisation $550.00M
Less: capital expenditure -$288.00M
Less/(add): working-capital cash-flow movement -$338.00M
Current unlevered FCFF $2.17B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 6.95% $2.40B $588.23M -$308.02M -$361.50M $2.32B $2.22B
2 5.84% $2.54B $622.58M -$400.15M -$382.60M $2.38B $2.10B
3 4.73% $2.66B $652.00M -$496.71M -$400.69M $2.42B $1.95B
4 3.61% $2.76B $675.56M -$595.11M -$415.16M $2.42B $1.80B
5 2.50% $2.83B $692.45M -$692.45M -$425.54M $2.40B $1.64B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 0.81
Cost of equity 9.16%
Pre-tax cost of debt 2.81%
WACC 8.87%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $38.64B
Implied terminal EV / EBITDA 7.55x
Terminal value as % of enterprise value 72.24%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $9.71B
Present value of terminal value $25.26B
Indicated enterprise value $34.97B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $34.97B
Less: gross interest-bearing debt $1.15B
Add: cash and equivalents $1.91B
Add: affiliate investments $0.00
Less: minority interests $0.00
Indicated common equity value $35.73B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 489,000,000.00
Share-count basis reported diluted weighted-average shares
Current market price $58.77
DCF indicative value per share $73.07
Indicative value vs. market price 24.34%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% within review band

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 4/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:28:56.659573 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

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