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Cognizant Technology Solutions Corporation (CTSH), headquartered in Teaneck, New Jersey, is a professional services company that provides consulting technology and outsourcing services. With a market cap of $37.5 billion, the company focuses on technology strategy consulting, complex systems development, enterprise software package implementation and maintenance, data warehousing, and business intelligence.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CTSH perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the information technology services industry. Cognizant is at the forefront of technological innovation with digital services like AI, cloud, data modernization, and IoT. The company integrates these services into clients' legacy systems for seamless transitions to modern operations. Its global delivery model, with teams in strategic locations, provides clients with onshore and offshore services, diversifying its client base and mitigating risks.
Despite its notable strength, CTSH slipped 6.3% from its 52-week high of $80.27, achieved on Aug. 1. Over the past three months, CTSH stock has gained 14.3%, outperforming the Nasdaq Composite’s ($NASX) marginal gains during the same time frame.
However, in the longer term, shares of CTSH fell marginally on a YTD basis but climbed 7.3% over the past 52 weeks, underperforming NASX’s YTD gains of 20% and solid 31.7% returns over the last year.
However, CTSH has been trading above its 50-day and 200-day moving averages since early July, indicating a recent bullish trend.
On Jul. 31, CTSH reported its Q2 results, and its shares rose more than 2% in the following trading session. Its adjusted EPS of $1.17 beat Wall Street expectations of $1.12. The company’s revenue was $4.9 billion, topping Wall Street forecasts of $4.8 billion.
In the competitive arena of information technology services, Gartner, Inc. (IT) has taken the lead over CTSH, delivering 13.8% returns on a YTD basis and solid 44.8% gains over the past 52 weeks.
Wall Street analysts are cautious about CTSH’s prospects. The stock has a consensus “Hold” rating from the 26 analysts covering it, and the mean price target of $79.05 suggests a potential upside of 5.1% from current price levels.
On the date of publication, Neha Panjwani 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.
