Is Cognizant Technology Solutions Corp. overvalued or undervalued?

As of 30 April 2025, the valuation grade for Cognizant Technology Solutions Corp. has moved from attractive to very attractive, indicating a strong improvement in its perceived value. The company is currently assessed as undervalued. Key ratios include a P/E ratio of 16, an EV to EBITDA of 10.58, and a ROCE of 22.54%, all of which suggest a solid financial performance relative to its valuation.
In comparison to peers, Cognizant's P/E ratio is significantly lower than that of International Business Machines Corp., which stands at 84.75, and Cisco Systems, Inc. at 24.57, indicating that Cognizant may be undervalued in the market. Additionally, its PEG ratio of 2.07 is competitive, especially against Accenture Plc's PEG of 26.54. While Cognizant's recent stock performance has lagged behind the S&P 500 in the short term, its one-year return of 12.26% outpaces the index's 10.26%, reinforcing the notion that it may be a compelling investment opportunity.