I was looking into cognizant technology solutions ticker ctsh today on august 14 2026 and the numbers from their recent sec filings look crazy mispriced. stock is sitting right around 59.29 dollars with a market cap of 26.7 billion dollars.
if you check their latest 10k for 2025 and recent q2 2026 10q report, the cash flow generation is insane. in 2025 they pulled in 21.1 billion in revenue and 2.23 billion in net income with free cash flow converting at 120 percent of net income which comes out to around 2.67 billion in fcf. in q2 2026 alone they generated 5.48 billion in revenue and 459 million in free cash flow
looking at valuation metrics the p/e ratio is currently sitting at just 12.7x trailing earnings which is super cheap for an it services provider. enterprise value is roughly 25.8 billion when subtracting net cash from market cap. dividing enterprise value by its free cashflow of 2.55 billion ttm gives an ev/fcf ratio of about 10.1x - which is way below industry peers.
here is the simple dcf math. if we take fcf per share of 5.65 dollars and apply a conservative 4 percent terminal growth rate with a 9 percent discount rate, the intrinsic value comes out to around 113 dollars per share. if you invest now it will perform at least 90% profit as the market re-rates it back to fair value
there is a chance it could theoretically drop short term if macro sentiment stays weak, but it would be temporary given their massive cash generation and share buybacks. im definitely adding some shares here before people realize how cheap it is.