Cognizant (CTSH) AI Stock Analysis

• Market Cap: $33.39B
• Dividend Yield: 1.84%
• Average Volume (3M): 4.22M
• Price to Earnings (P/E): 13.7
• Beta (1Y): 0.90
• Revenue Growth: 6.34%
• EPS Growth: 12.16%
• Country: US
• Employees: 336,300
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 1.31
• Shares Outstanding: 488,395,940
• 10 Day Avg. Volume: 5,403,922
• 30 Day Avg. Volume: 4,215,055
• PEG Ratio: 2.31
• Price to Book (P/B): 2.65
• Price to Sales (P/S): 1.93
• P/FCF Ratio: 20.88
• Enterprise Value/Market Cap: 1.13
• Enterprise Value/Revenue: 1.84
• Enterprise Value/Gross Profit: 5.50
• Enterprise Value/Ebitda: 9.92
• 1Y Price Target: $87.15
• Price Target Upside: 30.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 74 Outperform
• Price Target: $80.00 ▲(19.44% Upside)

Cognizant's overall stock score is mainly supported by a strong earnings call outlook and solid financial performance. While valuation is attractive, technical analysis indicates bearish momentum, which moderates the score. Strategic growth through AI and solid financials are key strengths, but market momentum presents short-term risks.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, enhancing long-term financial stability.

AI-Driven Innovation

AI-driven innovation boosts efficiency and competitiveness, positioning Cognizant as a leader in tech solutions and future-proofing its offerings.

Financial Stability

Low leverage and strong equity position provide financial stability, allowing for strategic investments and resilience against economic fluctuations.

Negative Factors

Demand Environment

Uncertain demand conditions can impact revenue predictability and strategic planning, posing a risk to sustained growth.

Tax Expense Impact

Significant tax expenses can reduce net income and cash reserves, affecting short-term financial performance and investment capacity.

Health Sciences Headwinds

Regulatory changes in health sciences could dampen demand, impacting revenue from this sector and necessitating strategic adjustments.

Cognizant Business Overview & Revenue Model

Company Description

Cognizant Technology Solutions Corporation (CTSH) is a multinational technology company that provides IT services, including digital, technology, consulting, and operations services. Founded in 1994 and headquartered in Teaneck, New Jersey, Cognizant operates primarily in the information technology services sector. The company serves a wide range of industries, including financial services, healthcare, manufacturing, retail, and telecommunications, offering solutions that help clients improve their business performance through technology.

How the Company Makes Money

Cognizant makes money primarily through its diverse range of IT services and consulting offerings. The company's revenue model is based on providing project-based and managed services, as well as ongoing maintenance and support contracts. Key revenue streams include consulting services, application development and management, digital strategy and solutions, and IT infrastructure services. Additionally, Cognizant generates revenue through long-term contracts with clients, often involving multi-year engagements that ensure a steady income stream. The company has also established significant partnerships with major technology providers, which enhance its service offerings and allow it to deliver integrated solutions to clients. Client retention and the expansion of existing contracts further contribute to Cognizant's earnings.

Cognizant Financial Statement Overview

Summary

Cognizant demonstrates strong financial performance with steady revenue growth of 3.8%, robust profitability, low leverage, and efficient cash flow management. Despite a slight decline in EBITDA margin, the company's overall financial health remains solid.

Income Statement

Cognizant's TTM revenue grew by approximately 3.8% compared to the previous year, indicating steady growth. The company maintains strong profitability, with a gross profit margin of 33.5% and a net profit margin of 11.9% in the TTM. Despite a slight decrease in EBITDA margin to 16.6% from 17.8%, the overall margins reflect healthy operations.

Balance Sheet

Cognizant has a solid financial position with a low debt-to-equity ratio of 0.08 and a high equity ratio of 75.8% as of the latest report. These metrics highlight financial stability and low leverage risk. The return on equity improved slightly to 15.9%, indicating efficient use of shareholders' equity.

Cash Flow

The company exhibits robust cash flow health, with a free cash flow growth rate of 24.8% in the latest TTM period. Operating cash flow to net income ratio stands strong at 1.05, demonstrating efficient cash generation relative to net earnings. Free cash flow to net income ratio is 0.94, indicating strong cash profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.49B	19.74B	19.35B	19.43B	18.51B	16.65B
Gross Profit	6.87B	6.78B	6.69B	6.98B	6.90B	5.98B
EBITDA	3.81B	3.52B	3.35B	3.60B	3.41B	2.68B
Net Income	2.44B	2.24B	2.13B	2.29B	2.14B	1.39B
Balance Sheet
Total Assets	20.16B	19.97B	18.48B	17.85B	17.85B	16.92B
Cash, Cash Equivalents and Short-Term Investments	1.81B	2.24B	2.63B	2.50B	2.72B	2.72B
Total Debt	1.18B	1.50B	1.31B	1.53B	1.64B	1.76B
Total Liabilities	4.88B	5.56B	5.26B	5.54B	5.86B	6.09B
Stockholders Equity	15.29B	14.41B	13.23B	12.31B	11.99B	10.84B
Cash Flow
Free Cash Flow	2.28B	1.83B	2.01B	2.24B	2.22B	2.90B
Operating Cash Flow	2.56B	2.12B	2.33B	2.57B	2.50B	3.30B
Investing Cash Flow	-1.42B	-1.65B	-331.00M	-106.00M	-2.16B	-1.24B
Financing Cash Flow	-1.56B	-915.00M	-1.61B	-1.94B	-1.20B	-2.01B

Cognizant Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 66.98
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTSH, the sentiment is Negative. The current price of 66.98 is below the 20-day moving average (MA) of 69.88, below the 50-day MA of 71.20, and below the 200-day MA of 76.56, indicating a bearish trend. The MACD of -1.11 indicates Positive momentum. The RSI at 36.94 is Neutral, neither overbought nor oversold. The STOCH value of 41.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CTSH.

Cognizant Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IT	77 Outperform	20.00B	16.24	82.56%	―	5.89%	54.53%
INFY	77 Outperform	67.87B	21.39	28.18%	3.07%	4.52%	-0.22%
CTSH	74 Outperform	$33.39B	13.74	16.69%	1.84%	6.34%	12.16%
ACN	74 Outperform	148.84B	19.14	24.61%	2.48%	7.36%	6.18%
WIT	73 Outperform	27.83B	20.11	15.86%	3.12%	-1.95%	35.65%
EPAM	68 Neutral	8.46B	21.65	10.94%	―	9.73%	-0.29%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Cognizant Corporate Events

Cognizant Reports Strong Q2 2025 Financial Results

Cognizant reported its second quarter 2025 financial results, highlighting an 8.1% year-over-year revenue increase to $5.25 billion, surpassing its guidance range. The company achieved a record $27.8 billion in bookings over the past 12 months, driven by two significant deals exceeding $1 billion each. Cognizant plans to return $2.0 billion to shareholders in 2025, reflecting confidence in its long-term strategy. The company continues to focus on AI and technology solutions, securing new contracts and partnerships to enhance its market position.

The most recent analyst rating on (CTSH) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on Cognizant stock, see the CTSH Stock Forecast page.

Cognizant Shareholders Re-elect Directors, Approve Proposals

On June 3, 2025, Cognizant held its annual meeting of shareholders, where all directors were re-elected, and proposals on executive compensation and the appointment of an independent accounting firm were approved. However, a shareholder proposal regarding the improvement of special shareholder meetings was not approved, indicating a mixed reception to governance changes among stakeholders.

The most recent analyst rating on (CTSH) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on Cognizant stock, see the CTSH Stock Forecast page.

Cognizant Announces Leadership Transition with New CAO

Cognizant Technology Solutions Corporation announced that Robert Telesmanic will retire from his role as SVP, Controller and Chief Accounting Officer effective July 1, 2025. Alina Kerdman, who has been with the company since 2010, will succeed him in this role. Kerdman will receive a comprehensive compensation package, including a base salary, cash incentives, and stock units, as she transitions into her new position. Telesmanic will remain with the company as a special advisor until the end of 2025 to ensure a smooth transition.

The most recent analyst rating on (CTSH) stock is a Buy with a $90.00 price target. To see the full list of analyst forecasts on Cognizant stock, see the CTSH Stock Forecast page.