Is Cognizant Technology Solutions Corp. overvalued or undervalued?

As of 30 July 2025, the valuation grade for Cognizant Technology Solutions Corp. has moved from very attractive to attractive. The company appears to be overvalued based on its current metrics. The P/E ratio stands at 16, which is higher than the peer average of approximately 13.98 for companies like Block, Inc. and significantly lower than Broadridge Financial Solutions, Inc. at 46.07. Additionally, the EV to EBITDA ratio of 10.58 is also above the peer average of 9.06, indicating a relative overvaluation.
In comparison to its peers, Cognizant's PEG ratio of 2.07 is higher than Block, Inc.'s 0.11, suggesting that its growth is not being priced in favorably relative to its earnings growth potential. Furthermore, the company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -8.63% compared to the S&P 500's 12.22%. This underperformance reinforces the notion that Cognizant may be overvalued in the current market environment.