Cognizant Technology Solutions (CTSH)
NASDAQ:CTSH
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Cognizant
(NASDAQ:CTSH)
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Rating:71Outperform
Price Target:
$61.00
▼(-0.49% Downside)
Action:ReiteratedDate:04/29/26
CTSH scores well on financial quality (low leverage, solid margins) and a constructive earnings outlook (raised margin guidance and strong bookings), which support the overall rating. This is partially offset by weak technicals—price below major moving averages with negative MACD—and some near-term margin/cash-flow pressure from investment and restructuring actions.
Positive Factors
Balance-sheet strength
Cognizant's very low leverage and steadily growing equity provide durable financial flexibility. This conservative capital structure supports continued M&A, sizable share buybacks and dividend programs, and the ability to fund AI investments or cyclical slowdowns without forcing distress-driven actions.
Negative Factors
Gross-margin pressure
Margin compression driven by higher compensation, bench growth and investment in integrated offerings risks persistency until utilization and productivity improve. If hiring and upskilling costs outpace efficiency gains, structural margin recovery could be slower than management anticipates.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strength
Cognizant's very low leverage and steadily growing equity provide durable financial flexibility. This conservative capital structure supports continued M&A, sizable share buybacks and dividend programs, and the ability to fund AI investments or cyclical slowdowns without forcing distress-driven actions.
Read all positive factors
Cognizant (CTSH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$25.07B
Dividend Yield1.46%
Average Volume (3M)5.36M
Price to Earnings (P/E)11.1
Beta (1Y)0.85
Revenue Growth6.55%
EPS Growth-3.10%
CountryUS
Employees336,300
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)1.40
Shares Outstanding473,869,480
10 Day Avg. Volume5,303,725
30 Day Avg. Volume5,362,527
Financial Highlights & Ratios
PEG Ratio20.23
Price to Book (P/B)2.66
Price to Sales (P/S)1.89
P/FCF Ratio15.38
Enterprise Value/Market Cap1.03
Enterprise Value/Revenue1.20
Enterprise Value/Gross Profit3.75
Enterprise Value/Ebitda6.43
Forecast
1Y Price Target
$78.53Price Target Upside28.11% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
EPS Forecast (FY)5.69
Revenue Forecast (FY)$22.33B
Cognizant Business Overview & Revenue Model
Company Description
Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services; Healthc...
How the Company Makes Money
Cognizant primarily makes money by delivering services to enterprise clients under client contracts that generate revenue from (1) time-and-materials billing (charging for labor hours and related expenses), (2) fixed-price or milestone-based proje...
Cognizant Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyCognizant Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 05, 2026
Earnings Call Sentiment Positive
The call presented multiple clear operational and strategic positives — strong bookings (21% YoY), continued revenue growth (3.9% CC), EPS growth (+14%), accelerating AI engagements and platform/IP momentum, and a structured Project LEAP program to drive future cost savings and margin expansion. Offsetting these positives were near-term execution and market pressures: a Q1 gross margin decline (-80 bps) driven by investments and comp costs, caution on discretionary spending, ACV flatness, a modest Q1 free cash flow read, and one-time costs for workforce restructuring. On balance, the company showed strategic momentum and financial discipline while acknowledging transitional costs and macro uncertainty.Positive Updates
Revenue Growth
Q1 revenue of $5.4 billion grew 3.9% year-over-year in constant currency, led by North America and ramp of recently won large deals.
Negative Updates
Gross Margin Pressure in Q1
Q1 gross margin decreased by ~80 basis points year-over-year, driven by investments in the integrated offering strategy, increased compensation costs (including a salary increase) and lower utilization from bench growth.
Read all updates
Q1-2026 Updates
Positive
Negative
Revenue Growth
Q1 revenue of $5.4 billion grew 3.9% year-over-year in constant currency, led by North America and ramp of recently won large deals.
Read all positive updates
Company Guidance
Management guided Q2 revenue growth of 3.2%–4.7% year‑over‑year in constant currency (including ~150 bps contribution from recent acquisitions / a partial Australia quarter) and reaffirmed full‑year revenue of 4.0%–6.5% CC (recent acquisitions expected to contribute ~150 bps), noting the midpoint assumes some improvement in discretionary spending in H2 and that large‑deal ramps plus two full quarters of Astra contribution will be meaningful late‑year drivers; they raised 2026 adjusted operating margin guidance to 16.0%–16.2% (implying ~20–40 bps YoY expansion on top of the 50 bps expansion in 2025) and gave EPS guidance of $5.63–$5.77 (7%–9% growth) on an expected diluted share count of ~473 million, with a tax rate of 25%–26%; Project LEAP is expected to deliver ~$200M–$300M of savings in 2026 (full benefit in 2027) while incurring ~$230M–$320M of one‑time 2026 costs (≈$200M–$270M severance + $30M–$50M other), with ~2/3 of savings to be reinvested and ~1/3 toward upskilling; cash/FCF guidance remains 90%–100% FCF conversion of net income and capital return plans are ~$1.6B in 2026 (≈$1.0B buybacks + remainder dividends); management cited supportive booking momentum (Q1 bookings +21%, TTM bookings +11%, book‑to‑bill 1.4) as underpinning the guidance.Cognizant Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
88
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.41B | 21.11B | 19.74B | 19.35B | 19.43B | 18.51B |
| Gross Profit | 6.86B | 7.12B | 6.78B | 6.69B | 6.98B | 6.90B |
| EBITDA | 4.00B | 4.17B | 3.53B | 3.38B | 3.60B | 3.41B |
| Net Income | 2.23B | 2.23B | 2.24B | 2.13B | 2.29B | 2.14B |
Balance Sheet | ||||||
| Total Assets | 20.50B | 20.69B | 19.97B | 18.48B | 17.85B | 17.85B |
| Cash, Cash Equivalents and Short-Term Investments | 1.52B | 1.91B | 2.24B | 2.63B | 2.50B | 2.72B |
| Total Debt | 1.09B | 1.57B | 1.50B | 1.31B | 1.53B | 1.64B |
| Total Liabilities | 5.43B | 5.68B | 5.56B | 5.26B | 5.54B | 5.86B |
| Stockholders Equity | 15.07B | 15.02B | 14.41B | 13.23B | 12.31B | 11.99B |
Cash Flow | ||||||
| Free Cash Flow | 2.47B | 2.60B | 1.83B | 2.01B | 2.24B | 2.22B |
| Operating Cash Flow | 2.76B | 2.88B | 2.12B | 2.33B | 2.57B | 2.50B |
| Investing Cash Flow | -1.03B | -230.00M | -1.65B | -331.00M | -106.00M | -2.16B |
| Financing Cash Flow | -2.21B | -2.27B | -915.00M | -1.61B | -1.94B | -1.20B |
Cognizant Technical Analysis
Neutral
61.30
Price Trends
63.49
Negative
72.74
Negative
71.64
Negative
Market Momentum
-1.01
Negative
48.15
Neutral
60.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTSH, the sentiment is Neutral. The current price of 61.3 is above the 20-day moving average (MA) of 60.77, below the 50-day MA of 63.49, and below the 200-day MA of 71.64, indicating a neutral trend. The MACD of -1.01 indicates Negative momentum. The RSI at 48.15 is Neutral, neither overbought nor oversold. The STOCH value of 60.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CTSH.
Cognizant Risk Analysis
Cognizant disclosed 14 risk factors in its most recent earnings report. Cognizant reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cognizant Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $109.72B | 17.31 | 24.82% | 2.25% | 7.27% | 0.49% | |
73 Outperform | $50.50B | 14.68 | 31.77% | 2.58% | 4.85% | 6.19% | |
71 Outperform | $25.07B | 11.05 | 14.79% | 1.46% | 6.55% | -3.10% | |
68 Neutral | $33.50B | 10.60 | 13.65% | ― | 3.60% | 17.25% | |
66 Neutral | $22.16B | 15.72 | 15.03% | 2.78% | -0.55% | -3.97% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
61 Neutral | $23.94B | 89.95 | 2.68% | 2.40% | 5.45% | -50.03% |
* Technology Sector Average
CTSH
Cognizant
52.43
-24.11
-31.50%
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Cognizant Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Cognizant Reports Strong Q1 2026 Growth and Margins
Positive
Apr 29, 2026
On April 29, 2026, Cognizant reported first quarter 2026 revenue of $5.4 billion, up 5.8% year-over-year, with constant-currency growth of 3.9%, GAAP operating margin of 15.6% and adjusted EPS of $1.40, up 13.8%. Bookings grew 21% in the quarter, ...
Business Operations and StrategyExecutive/Board Changes
Cognizant Elevates Ayyar to Lead Asia Pacific Operations
Positive
Feb 26, 2026
On February 23, 2026, Cognizant announced that Balu Ganesh Ayyar transitioned from his prior role as President of Intuitive Operations and Automation and Industry Solutions to become President of the Asia Pacific Japan and Industry Solutions Grou...
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Cognizant outlines 2026 growth outlook and capital returns
Positive
Feb 4, 2026
On February 4, 2026, Cognizant reported that fourth-quarter 2025 revenue climbed 4.9% to $5.3 billion while full-year sales rose 7% to $21.1 billion, aided by Belcan’s contribution and momentum in AI-led large deals, with operating margins, ...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.