Using the PEG framework with analyst consensus forward EPS growth of 10.4% plus 2.1% dividend yield, Cognizant Technology Solutions Corporation has a fair value of $58.71 based on NTM EPS (FY2026) of $5.66. The current PEG ratio is 1.03.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 8.3% |
| Dividend Yield | +2.1% |
| Adjusted Growth (clamped 8–25%) | 10.4% |
| Fair P/E | 10.4x |
| NTM EPS (FY2026) | $5.66 |
| Fair Value | $58.71 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $4.55 | — | — |
| FY2026E | $5.66 | +24.3% | 20 |
| FY2027E | $6.14 | +8.6% | 20 |
| FY2028E | $6.67 | +8.6% | 13 |
| FY2029E | $6.26 | -6.2% | 12 |
4Y Forward EPS CAGR: 8.3%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $2.1B | $4.05 | — |
| FY2022 | $2.3B | $4.41 | +8.9% |
| FY2023 | $2.1B | $4.21 | -4.5% |
| FY2024 | $2.2B | $4.51 | +7.1% |
| FY2025 | $2.2B | $4.55 | +0.9% |
4Y Historical EPS CAGR: 3.0%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.