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Teaneck, New Jersey-based Cognizant Technology Solutions Corporation (CTSH) is a leading professional services company that provides consulting, technology, and outsourcing services. With a market cap of $36.7 billion, Cognizant’s operations span various countries in the Americas, Europe, the Middle East, Asia-Pacific, and Africa. The tech company is expected to announce its Q2 earnings after the market closes on Wednesday, Jul. 31.
Ahead of the event, analysts expect Cognizant to report a profit of $1.12 per share, up 1.8% from $1.10 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS projections in each of the past four quarters. Its EPS for the last reported quarter exceeded the consensus estimate marginally, thanks to the steady spending by its clients.
Looking ahead to fiscal 2024, analysts expect Cognizant to report an EPS of $4.61, up 1.3% from $4.55 in fiscal 2023. In fiscal 2025, its EPS is expected to grow 6.5% year over year to $4.91.
CTSH stock is down 2.2% on a YTD basis, substantially underperforming the S&P 500 Index’s ($SPX) 16.5% gains and the S&P 500 Technology Sector SPDR’s (XLK) 17% returns over the same time frame.
Cognizant stock rose 1.4% in the trading session after the release of its Q1 results on May 1. Although the company surpassed Wall Street’s estimates, its revenue declined by 1.1%, and its net income fell by 5.9% compared to the year-ago quarter.
On the bright side, signs of an improving business environment and expectations of interest rate cuts have led clients to increase their spending on technology and consulting services, which should bode well for Cognizant. Also, it repurchased shares worth $133 million in the previous quarter, demonstrating its confidence in the company's valuation.
The consensus opinion on Cognizant stock is neutral, with an overall “Hold” rating. Out of the 24 analysts covering the stock, four recommend a “Strong Buy,” 19 advise a “Hold,” and one suggests a “Moderate Sell” rating.
The average target price for Cognizant stock is $75.14, indicating a potential upside of 1.7% from current price levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
