Cognizant Technology SolutionsMEX:CTSH 66 Gross Margin % is 32.79% as of Mar. 2026, which is 10% below its 10-year median of 36.29. GuruFocus rates MEX:CTSH with a GF Score™ of 66/100 and a GF Value™ of MXN1,545.49 (Significantly Undervalued). The stock has 1 warning sign investors should review. Among 2,685 Software companies, Cognizant Technology Solutions ranks worse than 58.85% on this metric.
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Cognizant Technology Solutions had a gross margin of 32.79% for the quarter that ended in Mar. 2026 => Competition eroding margins
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Cognizant Technology Solutions Gross Margin % Related Terms
Cognizant Technology Solutions Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
MEX:CTSH vs FISV, FIS, BR: Gross Margin % Comparison
For the Information Technology Services subindustry, Cognizant Technology Solutions's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Cognizant Technology Solutions Gross Margin % vs Software Industry
For the Software industry and Technology sector, Cognizant Technology Solutions's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Cognizant Technology Solutions's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Cognizant Technology Solutions (MEX:CTSH) has a Gross Margin % of 32.79% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Cognizant Technology Solutions and its competitors. This is 10% below median its historical median of 36.29. Over the past decade, Cognizant Technology Solutions' Gross Margin % has ranged from 33.51 to 39.88. According to the industry distribution chart, Cognizant Technology Solutions ranks #1580 out of 2685 companies in the Software industry, placing it in the top 58.8%.
Is Cognizant Technology Solutions' Gross Margin % too high?
Cognizant Technology Solutions' current Gross Margin % of 32.79% is 10% below median its 10-year median of 36.29. Over the past 10 years, this metric has ranged from a low of 33.51 to a high of 39.88. The Software industry median Gross Margin % is 40.45. Cognizant Technology Solutions' value of 32.79% is 18.9% below this industry median. Based on the distribution chart, Cognizant Technology Solutions ranks #1580 out of 2685 companies in the Software industry, which is below the industry midpoint. Overall, Cognizant Technology Solutions has a GF Score™ of 66/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Cognizant Technology Solutions' Gross Margin % compare to FISV and FIS?
According to the Software industry distribution chart, Cognizant Technology Solutions ranks #1580 out of 2685 companies for Gross Margin %. This places Cognizant Technology Solutions in the lower half of its industry. The industry median Gross Margin % is 40.45. Cognizant Technology Solutions' value of 32.79% is 18.9% below this benchmark. Historically, Cognizant Technology Solutions' own Gross Margin % has ranged from 33.51 to 39.88 over the past decade. While the company's 10-year median is 36.29 vs. the industry median of 40.45, Cognizant Technology Solutions has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Software company?
The median Gross Margin % among Software companies is 40.45, based on 2,685 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cognizant Technology Solutions's current Gross Margin % of 32.79% is 18.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Cognizant Technology Solutions and its competitors. For the Software industry, the median Gross Margin % is 40.45 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cognizant Technology Solutions's current Gross Margin % is 32.79%, which is 10% below median its own 10-year median of 36.29. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Cognizant Technology Solutions stock overvalued right now?
Based on GuruFocus' analysis, Cognizant Technology Solutions (MEX:CTSH) is currently considered Significantly Undervalued. The stock's GF Value™ is MXN1,545.49, compared to a current price of MXN722.03 — trading 53.3% below its estimated fair value. The current Gross Margin % is 32.79%, which is 10% below median its 10-year median of 36.29 and 18.9% below the Software industry median of 40.45. Cognizant Technology Solutions' overall GF Score™ is 66/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Cognizant Technology Solutions (MEX:CTSH), the current Gross Margin % is 32.79% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Cognizant Technology Solutions (MEX:CTSH) Overvalued in 2026?
Based on GuruFocus' analysis, Cognizant Technology Solutions stock appears to be undervalued.
The current stock price of MXN722.03 is trading 53.3% below its estimated GF Value™ of MXN1,545.49.
GuruFocus considers Cognizant Technology Solutions to be Significantly Undervalued.
Key valuation signals for MEX:CTSH:
Gross Margin %: 32.79% (10% below median its 10-year median of 36.29)
GF Value™: MXN1,545.49 vs. price of MXN722.03 (53.3% below fair value)
Industry Position: 18.9% below the Software median (#1580 of 2685)
No single metric tells the full story. See the MEX:CTSH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Cognizant Technology Solutions Business Description
Cognizant Technology Solutions is a multinational IT services provider that offers a range of consulting and business process outsourcing services. Originally founded in India, the company is headquartered in the US and serves enterprise customers spanning the financial services, healthcare, and resources industries. With most of its workforce located in India, Cognizant leverages a global delivery model that helps clients outsource their IT needs to offshore labor.
66GF Score
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