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The underperformance can be attributed to weakness in the Financial Services segment, which also dented CTSH’s top line.
In second-quarter 2024, revenues of $4.85 billion saw a year-over-year decline of 0.7% and 0.5% at constant currency (cc). Financial Services revenues dropped 1.1% year over year to $1.447 billion during this period.
Cognizant is benefiting from an expanding clientele and strong partner base, with a robust pipeline, which includes a favorable mix of business renewals and expansions of new opportunities.
Cognizant Technology Solutions Corporation Price and Consensus
Cognizant’s expanding partner base, which includes the likes of Microsoft (MSFT - Free Report) , Gentherm, Alphabet’s (GOOGL - Free Report) cloud business Google Cloud and Victory Capital Holdings (VCTR - Free Report) has been noteworthy.
In second-quarter 2024, CTSH maintained its momentum by securing large contracts. It signed five agreements with a total contract value of $100 million or more. In the first half of 2024, the company completed 13 similar deals, significantly surpassing its levels from 2023.
In the same quarter, Cognizant launched its first set of healthcare large language model solutions on Alphabet’s cloud business Google Cloud’s generative AI technology. These solutions target high-cost workflows in marketing operations, call center operations and provider management.
Cognizant’s collaboration with Microsoft has been noteworthy, as it aims to leverage generative AI and Copilot to drive innovation across industries, transforming enterprise operations and enhancing employee experiences.
In July, CTSH signed a five-year strategic agreement with Victory Capital Holdings to provide IT infrastructure, security and data & analytics support for its next phase of digital transformation.
Expanding its presence in the healthcare sector, Cognizant announced a transformative collaboration with mecwacare in September. The partnership aims to transform its healthcare services through an integrated platform powered by Salesforce and Workday, focusing on person-centered care and leveraging data and analytics for enhanced decision-making.
Cognizant’s Q3 Outlook Looks Dull
Cognizant’s strong portfolio, along with an expanding partner base, reflects solid top-line growth potential over the long run. However, it continues to expect the challenging macro environment to hurt spending rates in the Financial Services segment.
Cognizant expects third-quarter 2024 revenues to be between $4.89 billion and $4.96 billion, indicating a decline of 0.2% to an increase of 1.3% (an increase of 1.5% on a cc basis).
The Zacks Consensus Estimate for third-quarter revenues is pegged at $5 billion, indicating year-over-year growth of 2.17%.
The consensus mark for earnings is pegged at $1.15 per share, unchanged in the past 30 days. The figure indicates a year-over-year decline of 0.86%.
Conclusion
Cognizant’s shares are cheap, as suggested by a Value Score of B.
The forward 12-month Price/Sales ratio for CTSH stands at 1.99, lower than the industry’s 11.56.
However, the sluggish prospect makes CTSH a risky bet for growth-oriented investors, as suggested by a Growth Score of F.
Image: Bigstock
Cognizant Up 13% in a Year: Should You Buy, Retain or Sell the Stock?
Cognizant Technology Solutions‘ (CTSH - Free Report) shares have gained 13.1% in the past year compared with the Zacks Business - Software Services industry’s growth of 29.2% and the broader Zacks Computer & Technology sector’s return of 37.1%.
The underperformance can be attributed to weakness in the Financial Services segment, which also dented CTSH’s top line.
In second-quarter 2024, revenues of $4.85 billion saw a year-over-year decline of 0.7% and 0.5% at constant currency (cc). Financial Services revenues dropped 1.1% year over year to $1.447 billion during this period.
Cognizant is benefiting from an expanding clientele and strong partner base, with a robust pipeline, which includes a favorable mix of business renewals and expansions of new opportunities.
Cognizant Technology Solutions Corporation Price and Consensus
Cognizant Technology Solutions Corporation price-consensus-chart | Cognizant Technology Solutions Corporation Quote
Will CTSH’s Strong Partners Boost Prospects?
Cognizant’s expanding partner base, which includes the likes of Microsoft (MSFT - Free Report) , Gentherm, Alphabet’s (GOOGL - Free Report) cloud business Google Cloud and Victory Capital Holdings (VCTR - Free Report) has been noteworthy.
In second-quarter 2024, CTSH maintained its momentum by securing large contracts. It signed five agreements with a total contract value of $100 million or more. In the first half of 2024, the company completed 13 similar deals, significantly surpassing its levels from 2023.
In the same quarter, Cognizant launched its first set of healthcare large language model solutions on Alphabet’s cloud business Google Cloud’s generative AI technology. These solutions target high-cost workflows in marketing operations, call center operations and provider management.
Cognizant’s collaboration with Microsoft has been noteworthy, as it aims to leverage generative AI and Copilot to drive innovation across industries, transforming enterprise operations and enhancing employee experiences.
In July, CTSH signed a five-year strategic agreement with Victory Capital Holdings to provide IT infrastructure, security and data & analytics support for its next phase of digital transformation.
Expanding its presence in the healthcare sector, Cognizant announced a transformative collaboration with mecwacare in September. The partnership aims to transform its healthcare services through an integrated platform powered by Salesforce and Workday, focusing on person-centered care and leveraging data and analytics for enhanced decision-making.
Cognizant’s Q3 Outlook Looks Dull
Cognizant’s strong portfolio, along with an expanding partner base, reflects solid top-line growth potential over the long run. However, it continues to expect the challenging macro environment to hurt spending rates in the Financial Services segment.
Cognizant expects third-quarter 2024 revenues to be between $4.89 billion and $4.96 billion, indicating a decline of 0.2% to an increase of 1.3% (an increase of 1.5% on a cc basis).
The Zacks Consensus Estimate for third-quarter revenues is pegged at $5 billion, indicating year-over-year growth of 2.17%.
The consensus mark for earnings is pegged at $1.15 per share, unchanged in the past 30 days. The figure indicates a year-over-year decline of 0.86%.
Conclusion
Cognizant’s shares are cheap, as suggested by a Value Score of B.
The forward 12-month Price/Sales ratio for CTSH stands at 1.99, lower than the industry’s 11.56.
However, the sluggish prospect makes CTSH a risky bet for growth-oriented investors, as suggested by a Growth Score of F.
Cognizant currently has a Zacks Rank #3 (Hold), suggesting that it may be wise to wait for a more favorable entry point in the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.