Needham analyst Mayank Tandon has maintained their neutral stance on CTSH stock, giving a Hold rating yesterday.
Mayank Tandon has given his Hold rating due to a combination of factors influencing Cognizant’s current market position. The company reported strong first-quarter results that exceeded market expectations, driven by improved execution and a broad-based growth uptick. Management also provided a positive outlook for the second quarter and adjusted the fiscal year 2025 guidance upward, primarily due to favorable foreign exchange impacts.
However, Tandon remains cautious about Cognizant’s near-term growth prospects due to a 7% year-over-year decline in bookings, particularly in the Rest of World region. Additionally, there has been a noted slowdown in client decision-making and discretionary IT spending in certain segments, attributed to increased global macroeconomic uncertainty. Given Cognizant’s heightened exposure to discretionary IT spending and the shares trading at an ex-cash FY26 P/E multiple of approximately 14x, Tandon believes the risk-reward profile remains balanced, justifying the Hold rating.
In another report released yesterday, Bank of America Securities also maintained a Hold rating on the stock with a $91.00 price target.