Needham analyst Mayank Tandon has maintained their neutral stance on CTSH stock, giving a Hold rating today.
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Mayank Tandon’s rating is based on Cognizant’s solid performance in the second quarter, where the company exceeded market expectations due to improved execution and growth across various segments. The management’s slight increase in the fiscal year 2025 guidance and a positive third-quarter outlook, driven by enhanced business momentum and favorable foreign exchange rates, also contributed to the Hold rating.
Despite these positive developments, Tandon notes that the current share price, trading at approximately 13 times the expected cash-adjusted earnings for fiscal year 2026, suggests a balanced risk-reward scenario. Additionally, while the increase in bookings and the securing of significant deals are promising, there is a possibility that some of this growth may be attributed to delays from previous quarters. Therefore, the sustainability of this growth remains a critical factor to monitor, justifying the Hold recommendation.