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Teaneck, New Jersey-based Cognizant Technology Solutions Corporation (CTSH) is a leading professional services company providing consulting, technology, and outsourcing services. With a market cap of $39.6 billion, Cognizant’s operations span various countries in the Americas, Europe, the Middle East, Asia-Pacific, and Africa.
Companies worth $10 billion or more are generally described as "large-cap stocks," Cognizant fits the bill perfectly. Given the company’s extensive operations and strong clientele, its valuation above this mark is unsurprising.
CTSH touched its two-year high of $90.82 on Feb. 14 and is currently trading 12.4% below that peak. CTSH stock has gained 1.7% over the three months, notably outperforming the Technology Select Sector SPDR Fund’s (XLK) 8.7% decline during the same time frame.
Cognizant has outperformed the technology sector over the longer term as well. CTSH gained 5.6% over the past six months and nearly 6% over the past 52 weeks, outperforming XLK’s 2.3% dip over the past six months and 2.8% uptick over the past year.
To confirm the uptrend and recent plunge, CTSH has traded consistently above its 200-day moving average since mid-September 2024 and dropped below its 50-day moving average last week.
Cognizant’s stock prices soared 4.2% in the trading session after the release of its better-than-expected Q4 results on Feb. 5. The company observed an 11% year-over-year increase in bookings and reported a 6.8% year-over-year growth in revenues to $5.1 billion, exceeding the Street’s expectations by 49 basis points. However, due to higher cost of sales and SG&A expenses Cognizant’s net margins experienced a slight contraction. Its adjusted net income increased by a modest 4.7% year-over-year to $800 million. Nevertheless, its adjusted EPS of $1.21 surpassed the consensus estimates by 8%, boosting investor confidence.
Furthermore, Cognizant notably outperformed its peer Wipro Limited’s (WIT) 5.8% decline over the past six months and 83 bps dip over the past 52 weeks.
However, analysts remain cautious about Cognizant’s longer-term prospects. The stock has a consensus “Hold” rating among the 23 analysts covering it. CTSH’s mean price target of $90.63 suggests a 13.9% premium to current price levels.
On the date of publication, Aditya Sarawgi 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.
