ROE % measures the rate of return on the ownership interest (shareholder's equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' equity (also known as net assets or assets minus liabilities). ROE % shows how well a company uses investment funds to generate earnings growth. ROE %s between 15% and 20% are considered desirable.
The factors that affect a company's ROE % can be illustrated with the three-step DuPont Analysis:
Note:
The net income data used here is four times the quarterly (Mar. 2026) net income data. The Revenue data used here is four times the quarterly (Mar. 2026) revenue data. The same rule applies to Pre-Tax Income and Operating Income.
* In the five-step DuPont Analysis, Operating Income is only available for non-financial companies. Thus, for Insurance companies, we use EBIT as a substitution of Operating Income. For Banks, both Operating Income and EBIT is unavailable. Thus we combined Interest Burden and Operating Margin % into Pretax Margin %, and the DuPont Analysis is divided into four components instead.
* 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.
Be Aware
Net Income is used.
Because a company can increase its ROE % by having more financial leverage, it is important to watch the equity multiplier when investing in high ROE % companies. Like ROA %, ROE % 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 ROE %s can be extremely high.
Cognizant Technology Solutions ROE % Related Terms
Cognizant Technology Solutions ROE % 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.
For the Information Technology Services subindustry, Cognizant Technology Solutions's ROE %, along with its competitors' market caps and ROE % 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 ROE % vs Software Industry
For the Software industry and Technology sector, Cognizant Technology Solutions's ROE % distribution charts can be found below:
* The bar in red indicates where Cognizant Technology Solutions's ROE % 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 ROE %, the net income of the last fiscal year and the average total shareholder 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.
ROE % is displayed in the 30-year financial page.
Cognizant Technology Solutions (MEX:CTSH) has a ROE % of 17.62% as of Mar. 2026. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Cognizant Technology Solutions and its competitors. This is near median its historical median of 16.31. Over the past decade, Cognizant Technology Solutions' ROE % has ranged from 12.74 to 19.02. According to the industry distribution chart, Cognizant Technology Solutions ranks #699 out of 2681 companies in the Software industry, placing it in the top 26.1%.
Is Cognizant Technology Solutions' ROE % too high?
Cognizant Technology Solutions' current ROE % of 17.62% is near median its 10-year median of 16.31. Over the past 10 years, this metric has ranged from a low of 12.74 to a high of 19.02. The Software industry median ROE % is 4.73. Cognizant Technology Solutions' value of 17.62% is 272.5% above this industry median. Based on the distribution chart, Cognizant Technology Solutions ranks #699 out of 2681 companies in the Software industry, which is above 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' ROE % compare to FISV and FIS?
According to the Software industry distribution chart, Cognizant Technology Solutions ranks #699 out of 2681 companies for ROE %. This puts Cognizant Technology Solutions in the upper half of its industry. The industry median ROE % is 4.73. Cognizant Technology Solutions' value of 17.62% is 272.5% above this benchmark. Historically, Cognizant Technology Solutions' own ROE % has ranged from 12.74 to 19.02 over the past decade. While the company's 10-year median is 16.31 vs. the industry median of 4.73, 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 ROE % for a Software company?
The median ROE % among Software companies is 4.73, based on 2,681 companies in the industry. Companies in the top quartile (top 25%) have a ROE % significantly above this median, while those in the bottom quartile fall well below. However, ROE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Cognizant Technology Solutions's current ROE % of 17.62% is 272.5% 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 ROE % mean?
A high ROE % can signal that a stock is expensive relative to its fundamentals. Return on equity is the ratio of current-period net income to average two-period total equity. View historical data on Cognizant Technology Solutions and its competitors. For the Software industry, the median ROE % is 4.73 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Cognizant Technology Solutions's current ROE % is 17.62%, which is near median its own 10-year median of 16.31. 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 MXN1,477.03, compared to a current price of MXN722.03 — trading 51.1% below its estimated fair value. The current ROE % is 17.62%, which is near median its 10-year median of 16.31 and 272.5% above the Software industry median of 4.73. 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 ROE % calculated?
ROE % is calculated from a company's financial statements. For Cognizant Technology Solutions (MEX:CTSH), the current ROE % is 17.62% 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 51.1% below its estimated GF Value™ of MXN1,477.03.
GuruFocus considers Cognizant Technology Solutions to be Significantly Undervalued.
Key valuation signals for MEX:CTSH:
ROE %: 17.62% (near median its 10-year median of 16.31)
GF Value™: MXN1,477.03 vs. price of MXN722.03 (51.1% below fair value)
Industry Position: 272.5% above the Software median (#699 of 2681)
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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