Cognizant Technology Solutions Corporation (CTSH): fair value, margin of safety and Wheel Score

Is CTSH undervalued?

CTSH closed at 65.77 on 16 Oct 2026 against a GLS average fair value of 68.20 - 3.6% below fair value, which our screens read as "fairly priced". 3 of 9 models are above the current price. There is no discount to lean on here, so the margin of safety is not the reason to look at the stock.

The 9 models disagree widely: Lynch gives 13.36 while 10 Cap gives 170.65. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.

The nightly engine files CTSH under Value: positive earnings at a P/E of 18 or less.

Nine valuation models for CTSH

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is average - CTSH passes 6 of the nine Piotroski tests, which passes the Sunday Scan's "6 or more" rule. The Financials tab on the Quote page shows which tests fail. The GLS Moat score is 7.5 out of 10, built from ten years of revenue, earnings, margins, cash flow, share count and returns on capital scored for consistency - a high reading that points to a durable business.

Returns on capital are high - ROIC 13.4%, ROE 14.9%, ROA 10.8% - with debt at 0.10 times equity and a free-cash-flow yield of 8.8%.

The dividend yield is 1.98% at a payout ratio of 28%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold. Revenue comes mainly from Financial Services 32%, Healthcare 29%, Products and Resources 24% (quarter Q2 FY2026).

Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 10/10 on the GLS smart-money scales; the last recorded Congressional buy was on 25 Sep 2026.

Wheel Score 79: Good

CTSH scores 79 out of 100 on the Wheel Score (Good band, 65-79). The score blends the margin of safety (Value, 14/25), Piotroski health (13/20), the GLS moat (11/15), the option premium on offer (20/20) and how easily the stock trades (20/20). Value (14/25) is the part holding the score back.

Implied volatility is 50% on the near-the-money contracts 20-60 days out - inside the 35-60% range the Wheel Score pays full marks for: enough premium to be worth selling, not so much that the risk is unpaid. The option chain is deep: 95,194 contracts of open interest across all expiries, which means tight fills at most strikes.

Volume runs at 7.8M shares a day on a market cap of $29.6B, with a beta of 0.85; the Stability part of the Wheel Score gives that 20 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

Cognizant Technology Solutions Corporation reports earnings on 29 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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