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Cognizant (CTSH) to Report Q4 Earnings: What's in Store?
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Cognizant Technology Solutions (CTSH - Free Report) is set to report fourth-quarter 2020 results on Feb 3.
The Zacks Consensus Estimate for revenues is currently pegged at $4.2 billion, indicating a decline of nearly 1% from the figure reported in the year-ago quarter.
The consensus mark for fourth-quarter earnings has remained unrevised at 90 cents per share over the past 30 days. The estimate suggests a year-over-year fall of 15.9%.
Notably, the company beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 8.9%.
Let’s see how things have shaped up prior to the upcoming announcement.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant’s quarterly performance is likely to reflect its domain expertise in areas like automation, digital engineering, cloud and IoT. Moreover, stellar demand for digital transformation across enterprises is anticipated to have fueled growth in the company’s digital bookings.
Steady adoption of digital engineering, cloud infrastructure, IoT, AI and analytics solutions is expected to have driven the company’s product and resource revenues during the to-be-reported quarter.
Further, this Zacks Rank #3 (Hold) company’s solid partner base, which includes Salesforce (CRM - Free Report) , Workday (WDAY - Free Report) , Oracle (ORCL - Free Report) , SAP and ServiceNow, is likely to have helped the company provide a complete suite of enterprise application services to its clients, thereby aiding client wins during the December-end quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Apart from this, the company pursued several acquisitions, including Bright Wolf, Tin Roof Software, 10th Magnitude and Zenith Technologies, to strengthen its digital capabilities, which is likely to have been a major positive during the quarter in discussion. Notably, the firm projects closed acquisitions to add nearly 200 basis points to revenue growth in fiscal 2020.
Additionally, the communications, media and technology segment is likely to have benefited from steady demand for digital engineering services. Nonetheless, the segment’s top-line results might underline the negative impact of the exit from certain portions of the content services business, and prevalent pressure in the media and entertainment.
Furthermore, steady demand for digital operations and cloud-based environments is likely to have aided Life Sciences in the to-be-reported quarter. Also, strong demand from biopharma customers, along with contribution from Zenith’s acquisition, is likely to have aided the top line in the healthcare segment.
However, reduced client demand, primarily in the travel and hospitality industries hit by the coronavirus-led restrictions, might have thwarted top-line growth in the soon-to-be-reported quarter.
Apart from this, weakness across select global banking accounts is expected to have dampened growth in the financial services segment.
Moreover, in the wake of the ransomware attack during the second quarter, some clients opted to suspend Cognizant’s access to their networks, which is likely to have impacted billings in the quarter under review. Also, inflated costs to remedy the attack might likely have eroded the operating margin.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Cognizant (CTSH) to Report Q4 Earnings: What's in Store?
Cognizant Technology Solutions (CTSH - Free Report) is set to report fourth-quarter 2020 results on Feb 3.
The Zacks Consensus Estimate for revenues is currently pegged at $4.2 billion, indicating a decline of nearly 1% from the figure reported in the year-ago quarter.
The consensus mark for fourth-quarter earnings has remained unrevised at 90 cents per share over the past 30 days. The estimate suggests a year-over-year fall of 15.9%.
Notably, the company beat the Zacks Consensus Estimate in all of the trailing four quarters, the average surprise being 8.9%.
Let’s see how things have shaped up prior to the upcoming announcement.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation price-eps-surprise | Cognizant Technology Solutions Corporation Quote
Factors to Consider
Cognizant’s quarterly performance is likely to reflect its domain expertise in areas like automation, digital engineering, cloud and IoT. Moreover, stellar demand for digital transformation across enterprises is anticipated to have fueled growth in the company’s digital bookings.
Steady adoption of digital engineering, cloud infrastructure, IoT, AI and analytics solutions is expected to have driven the company’s product and resource revenues during the to-be-reported quarter.
Further, this Zacks Rank #3 (Hold) company’s solid partner base, which includes Salesforce (CRM - Free Report) , Workday (WDAY - Free Report) , Oracle (ORCL - Free Report) , SAP and ServiceNow, is likely to have helped the company provide a complete suite of enterprise application services to its clients, thereby aiding client wins during the December-end quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.
Apart from this, the company pursued several acquisitions, including Bright Wolf, Tin Roof Software, 10th Magnitude and Zenith Technologies, to strengthen its digital capabilities, which is likely to have been a major positive during the quarter in discussion. Notably, the firm projects closed acquisitions to add nearly 200 basis points to revenue growth in fiscal 2020.
Additionally, the communications, media and technology segment is likely to have benefited from steady demand for digital engineering services. Nonetheless, the segment’s top-line results might underline the negative impact of the exit from certain portions of the content services business, and prevalent pressure in the media and entertainment.
Furthermore, steady demand for digital operations and cloud-based environments is likely to have aided Life Sciences in the to-be-reported quarter. Also, strong demand from biopharma customers, along with contribution from Zenith’s acquisition, is likely to have aided the top line in the healthcare segment.
However, reduced client demand, primarily in the travel and hospitality industries hit by the coronavirus-led restrictions, might have thwarted top-line growth in the soon-to-be-reported quarter.
Apart from this, weakness across select global banking accounts is expected to have dampened growth in the financial services segment.
Moreover, in the wake of the ransomware attack during the second quarter, some clients opted to suspend Cognizant’s access to their networks, which is likely to have impacted billings in the quarter under review. Also, inflated costs to remedy the attack might likely have eroded the operating margin.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>