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Valued at $39.7 billion by market cap, Cognizant Technology Solutions Corporation (CTSH) is a global leader in IT services and consulting. Headquartered in Teaneck, New Jersey, the company provides a comprehensive range of digital, technology, and business solutions, helping clients across industries drive innovation, enhance operational efficiency, and achieve business transformation.
Companies valued at over $10 billion are often categorized as “large-cap stocks,” a distinction Cognizant Technology Solutions exemplifies through its strong market presence, innovation, and leadership in IT services and consulting. Cognizant’s commitment to driving digital transformation, enhancing operational efficiency, and delivering cutting-edge technology and business solutions underscores its stability, adaptability, and ability to thrive in an increasingly competitive and rapidly evolving global digital economy.
Cognizant Technology Solutions is down 2.1% from its 52-week high of $82.41, achieved on Nov. 13. Over the past three months, the stock has gained 3.6%, underperforming the broader Dow Jones Industrials Average’s ($DOWI) 5% gains over the same time frame.
Over the longer term, CTSH stock has risen 6% over the past 52 weeks and gained 6.8% on a YTD basis, significantly underperforming the Dow's YTD growth of 16% and its 17.2% return over the past year.
However, CTSH has shown clear bullish momentum, consistently trading above its 50-day moving average since June and staying above the 200-day moving average since early July.
On Oct. 30, Cognizant Technology Solutions reported its Q3 earnings, leading to a 1.5% dip in its stock. The company posted an adjusted EPS of $1.25, surpassing Wall Street estimates of $1.14 and reflecting a 7.8% year-over-year increase. Revenue reached $5.04 billion, slightly ahead of analysts’ expectations of $5 billion, representing 3% growth compared to the prior year.
Cognizant narrowed its full-year 2024 revenue growth guidance between 1.4% and 1.9% in constant currency, unchanged at the midpoint. Additionally, the adjusted operating margin guidance 2024 remains flat year-over-year at approximately 15.1%.
Its rival, Gartner, Inc. (IT), has gained 13.1% over the past 52 weeks and 11.4% on a YTD basis, outperforming CTSH in both time frames.
Given its recent weak price performance, analysts are cautious about Cognizant Technology Solutions. The stock has a consensus "Hold" rating from 25 analysts, with a mean price target of 81.19, indicating only a modest upside from its current level.
