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Cognizant Technology Solutions Corporation (CTSH), headquartered in Teaneck, New Jersey, a professional services company, provides consulting and technology, and outsourcing services. With a market cap of $41 billion, the company focuses on technology strategy consulting, complex systems development, enterprise software package implementation and maintenance, data warehousing, and business intelligence.
Shares of this outsourcing and technology giant have underperformed the broader market over the past year. CTSH has gained 6.4% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 20.9%. However, in 2025, CTSH stock is up 7.8%, surpassing the SPX’s 1.9% rise on a YTD basis.
Narrowing the focus, CTSH’s underperformance looks more pronounced compared to the Vanguard Information Technology Index Fund ETF (VGT). The exchange-traded fund has gained about 20.3% over the past year. Moreover, CTSH’s gains on a YTD basis outshine the ETF’s 2.2% losses over the same time frame.
CTSH's lower performance can be linked to obstacles such as limited spending in the manufacturing, logistics, and telecom industries, as well as weak software spending in Europe. These challenges likely impacted spending rates and hindered overall revenue growth.
On Oct. 30, CTSH shares closed down more than 1% after reporting its Q3 results. Its adjusted EPS of $1.25 topped Wall Street expectations of $1.14. The company’s revenue was $5.04 billion, topping Wall Street forecasts of $5 billion. The company expects full-year adjusted EPS to be between $4.63 and $4.67, and expects revenue to range from $19.7 billion to $19.8 billion.
For the current fiscal year, ended in December 2024, analysts expect CTSH’s EPS to grow 2.4% to $4.66 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 24 analysts covering CTSH stock, the consensus is a “Moderate Buy.” That’s based on five “Strong Buy” ratings, and 19 “Holds.”
This configuration is more bullish than two months ago, with four analysts suggesting a “Strong Buy.”
On Jan. 31, Morgan Stanley (MS) analyst kept an “Equal Weight” rating on CTSH and raised the price target to $80.
The mean price target of $84.16 represents a 1.5% premium to CTSH’s current price levels. The Street-high price target of $100 suggests an upside potential of 20.6%.
