Teaneck, New Jersey-based Cognizant Technology Solutions Corporation (CTSH) is a leading professional services company providing consulting, technology, and outsourcing solutions. With a market cap of $37.8 billion, its operations span various countries in the Americas, Europe, the Middle East, Indo-Pacific, and Africa. CTSH is expected to announce its Q3 earnings after the market closes on Wednesday, Oct. 30.
Ahead of the event, analysts expect the tech company to report a profit of $1.15 per share, marginally down from $1.16 per share reported in the year-ago quarter. The company has surpassed Wall Street’s adjusted EPS projections in each of the past four quarters. Its adjusted EPS in Q2 grew 6.4% year-over-year to $1.17, exceeding the consensus estimates by 4.5%.
For fiscal 2024, analysts expect CTSH to report an adjusted EPS of $4.62, up 1.5% from $4.55 in fiscal 2023. In fiscal 2025, its adjusted EPS is expected to grow 7.4% year-over-year to $4.96.
CTSH stock has experienced a marginal gain in 2024, significantly underperforming the S&P 500 Index’s ($SPX) 21.5% rise and the Technology Select Sector SPDR Fund’s (XLK) 18.7% return on a YTD basis.
CTSH stock recovered marginally following the release of its better-than-expected Q2 earnings on Jul. 31. While its revenues of $4.9 billion saw a marginal decline compared to the year-ago quarter, it came in at the higher end of its revenue guidance range and exceeded Wall Street’s topline estimates. Despite a drop in revenue, net income surged by a massive 22.2% year-over-year to $566 million, driven by a 219-basis-point net margin expansion to 11.7%.
Following the initial uptick in prices, the stock price fell over 3% in each of the next two trading sessions. The company provided a revenue guidance range for Q3, representing a marginal decline to a growth of 1.3% year-over-year, along with full-year adjusted EPS guidance of $4.62 to $4.70, which offered only modest reassurance to investors.
The consensus opinion on CTSH stock is cautious, with an overall “Hold” rating. Out of the 26 analysts covering the stock, five recommend “Strong Buy” and 21 advise a “Hold” rating. As of writing, CTSH is trading below the mean price target of $79.91.
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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.
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