Cognizant Technology SolutionsMEX:CTSH +0.69%69 Return-on-Tangible-Equity is 42.76% as of Mar. 2026, which is 28% above its 10-year median of 33.31. GuruFocus rates MEX:CTSH with a GF Score™ of 69/100 and a GF Value™ of MXN1,452.79 (Significantly Undervalued). The stock has 1 warning sign investors should review. Among 2,470 Software companies, Cognizant Technology Solutions ranks better than 78.1% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Cognizant Technology Solutions's annualized net income for the quarter that ended in Mar. 2026 was MXN47,751 Mil. Cognizant Technology Solutions's average shareholder tangible equity for the quarter that ended in Mar. 2026 was MXN111,661 Mil. Therefore, Cognizant Technology Solutions's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was 42.76%.
The historical rank and industry rank for Cognizant Technology Solutions's Return-on-Tangible-Equity or its related term are showing as below:
MEX:CTSH'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 21.17 Med: 33.31 Max: 43.27
Current: 35.16
During the past 13 years, Cognizant Technology Solutions's highest Return-on-Tangible-Equity was 43.27%. The lowest was 21.17%. And the median was 33.31%.
MEX:CTSH's Return-on-Tangible-Equity is ranked better than 78.1% of 2470
companies
in the Software industry
Industry Median: 8.77
vs MEX:CTSH: 35.16
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Cognizant Technology Solutions Return-on-Tangible-Equity Related Terms
Cognizant Technology Solutions Return-on-Tangible-Equity 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 FIS, CDW, BR: Return-on-Tangible-Equity Comparison
For the Information Technology Services subindustry, Cognizant Technology Solutions's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Software Industry
For the Software industry and Technology sector, Cognizant Technology Solutions's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Cognizant Technology Solutions's Return-on-Tangible-Equity 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of 42.76% mean?
Cognizant Technology Solutions (MEX:CTSH) has a Return-on-Tangible-Equity of 42.76% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Cognizant Technology Solutions and its competitors. This is 28% above median its historical median of 33.31. Over the past decade, Cognizant Technology Solutions' Return-on-Tangible-Equity has ranged from 21.17 to 43.27. According to the industry distribution chart, Cognizant Technology Solutions ranks #541 out of 2470 companies in the Software industry, placing it in the top 21.9%.
Is Cognizant Technology Solutions' Return-on-Tangible-Equity too high?
Cognizant Technology Solutions' current Return-on-Tangible-Equity of 42.76% is 28% above median its 10-year median of 33.31. Over the past 10 years, this metric has ranged from a low of 21.17 to a high of 43.27. The Software industry median Return-on-Tangible-Equity is 8.77. Cognizant Technology Solutions' value of 42.76% is 387.6% above this industry median. Based on the distribution chart, Cognizant Technology Solutions ranks #541 out of 2470 companies in the Software industry, which is in the top quartile — a strong position relative to peers. Overall, Cognizant Technology Solutions has a GF Score™ of 69/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Cognizant Technology Solutions' Return-on-Tangible-Equity compare to FIS and CDW?
According to the Software industry distribution chart, Cognizant Technology Solutions ranks #541 out of 2470 companies for Return-on-Tangible-Equity. This places Cognizant Technology Solutions in the top 22% of its industry — outperforming the majority of peers. The industry median Return-on-Tangible-Equity is 8.77. Cognizant Technology Solutions' value of 42.76% is 387.6% above this benchmark. Historically, Cognizant Technology Solutions' own Return-on-Tangible-Equity has ranged from 21.17 to 43.27 over the past decade. While the company's 10-year median is 33.31 vs. the industry median of 8.77, Cognizant Technology Solutions has consistently been above 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 Return-on-Tangible-Equity for a Software company?
The median Return-on-Tangible-Equity among Software companies is 8.77, based on 2,470 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cognizant Technology Solutions's current Return-on-Tangible-Equity of 42.76% is 387.6% above 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 Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Cognizant Technology Solutions and its competitors. For the Software industry, the median Return-on-Tangible-Equity is 8.77 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cognizant Technology Solutions's current Return-on-Tangible-Equity is 42.76%, which is 28% above median its own 10-year median of 33.31. 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 MXN1,452.79, compared to a current price of MXN727.00 — trading 50% below its estimated fair value. The current Return-on-Tangible-Equity is 42.76%, which is 28% above median its 10-year median of 33.31 and 387.6% above the Software industry median of 8.77. Cognizant Technology Solutions' overall GF Score™ is 69/100 with 1 warning sign to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Cognizant Technology Solutions (MEX:CTSH), the current Return-on-Tangible-Equity is 42.76% 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 MXN727.00 is trading 50% below its estimated GF Value™ of MXN1,452.79.
GuruFocus considers Cognizant Technology Solutions to be Significantly Undervalued.
Key valuation signals for MEX:CTSH:
Return-on-Tangible-Equity: 42.76% (28% above median its 10-year median of 33.31)
GF Value™: MXN1,452.79 vs. price of MXN727.00 (50% below fair value)
Industry Position: 387.6% above the Software median (#541 of 2470)
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.
69GF Score
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