Is Cognizant Technology Solutions Corp. overvalued or undervalued?

As of 24 October 2025, the valuation grade for Cognizant Technology Solutions Corp. has moved from attractive to very attractive, indicating a strong improvement in its valuation outlook. The company appears undervalued, particularly when considering its P/E ratio of 16, which is lower than the peer average of approximately 13.98 for similar companies. Additionally, its EV to EBITDA ratio stands at 10.58, while the peer average is significantly lower at 9.06, suggesting that Cognizant is trading at a premium compared to its peers. The PEG ratio of 2.07 also highlights potential growth concerns relative to its price, although it remains competitive within the industry.
In comparison to its peers, Block, Inc. has a P/E of 12.44, and Broadridge Financial Solutions, Inc. shows a much higher P/E at 46.07, reflecting varying market expectations. Despite recent stock performance, where Cognizant's YTD return of -11.76% lags behind the S&P 500's 15.47%, its long-term 3-year return of 11.69% suggests resilience compared to the S&P 500's 78.85%. This mixed performance reinforces the notion that while Cognizant may currently be undervalued, it has the potential for recovery and growth in the long run.