Zacks Investment Research Upgrades Cognizant Technology Solutions (NASDAQ:CTSH) to Buy

Cognizant Technology Solutions (NASDAQ:CTSH) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a report issued on Wednesday, January 10th. The brokerage currently has a $82.00 price objective on the information technology service provider’s stock. Zacks Investment Research‘s price objective would indicate a potential upside of 9.73% from the company’s previous close.

According to Zacks, “Cognizant shares have outperformed the industry in the past one year. Growth can be attributed to the company's significant exposure to the fast-growing verticals like Financial Services and Healthcare. Higher demand from payer and top-tier consulting clients in the healthcare segment will help to sustain the growth momentum.  The company’s ability to harness the ongoing digital transition is a tailwind. The company is also significantly benefiting from accretive acquisitions. The extensive share repurchase program is another positive. Cognizant has also gained deep industry expertise and knowledge of the domains through partnerships with top firms like Microsoft and SAP.  However, the company faces significant geographic, domain and customer concentration risks which can negatively impact its business. Besides, stiff competition in the IT services market remains a concern.”

Other equities analysts also recently issued research reports about the stock. Bank of America reiterated a “buy” rating and issued a $86.00 price target on shares of Cognizant Technology Solutions in a report on Tuesday, September 12th. KeyCorp reiterated a “buy” rating and issued a $79.00 price target on shares of Cognizant Technology Solutions in a report on Thursday, October 12th. Cowen reiterated a “buy” rating and issued a $80.00 price target on shares of Cognizant Technology Solutions in a report on Thursday, October 12th. Jefferies Group restated a “buy” rating and set a $81.00 target price on shares of Cognizant Technology Solutions in a report on Thursday, October 12th. Finally, Royal Bank of Canada restated a “buy” rating and set a $77.00 target price on shares of Cognizant Technology Solutions in a report on Sunday, October 8th. One analyst has rated the stock with a sell rating, four have issued a hold rating, twenty-one have assigned a buy rating and two have assigned a strong buy rating to the stock. Cognizant Technology Solutions presently has an average rating of “Buy” and an average target price of $81.83.

Shares of Cognizant Technology Solutions (NASDAQ CTSH) traded up $0.17 during trading on Wednesday, reaching $74.73. 3,547,700 shares of the company’s stock were exchanged, compared to its average volume of 3,489,760. The stock has a market cap of $44,540.00, a P/E ratio of 23.14, a P/E/G ratio of 1.43 and a beta of 1.08. The company has a debt-to-equity ratio of 0.07, a quick ratio of 3.29 and a current ratio of 3.29. Cognizant Technology Solutions has a 52 week low of $51.52 and a 52 week high of $76.51.

Cognizant Technology Solutions (NASDAQ:CTSH) last announced its quarterly earnings data on Wednesday, November 1st. The information technology service provider reported $0.98 EPS for the quarter, topping the Zacks’ consensus estimate of $0.85 by $0.13. The company had revenue of $3.77 billion during the quarter, compared to the consensus estimate of $3.77 billion. Cognizant Technology Solutions had a net margin of 13.42% and a return on equity of 18.94%. Cognizant Technology Solutions’s quarterly revenue was up 9.1% on a year-over-year basis. During the same quarter in the prior year, the firm earned $0.86 EPS. equities analysts anticipate that Cognizant Technology Solutions will post 3.35 EPS for the current year.

In other Cognizant Technology Solutions news, CEO Francisco Dsouza sold 482,000 shares of the firm’s stock in a transaction dated Tuesday, November 21st. The shares were sold at an average price of $72.04, for a total transaction of $34,723,280.00. Following the sale, the chief executive officer now directly owns 621,643 shares of the company’s stock, valued at approximately $44,783,161.72. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available through the SEC website. Also, insider Venkat Krishnaswamy sold 4,000 shares of the firm’s stock in a transaction that occurred on Monday, November 6th. The stock was sold at an average price of $75.00, for a total transaction of $300,000.00. Following the completion of the sale, the insider now directly owns 3,919 shares in the company, valued at $293,925. The disclosure for this sale can be found here. Insiders have sold a total of 807,286 shares of company stock worth $58,679,209 over the last ninety days. 1.08% of the stock is owned by corporate insiders.

Several institutional investors and hedge funds have recently added to or reduced their stakes in the stock. FMR LLC boosted its position in shares of Cognizant Technology Solutions by 81.6% in the second quarter. FMR LLC now owns 25,065,752 shares of the information technology service provider’s stock worth $1,664,366,000 after acquiring an additional 11,262,360 shares during the last quarter. Edgewood Management LLC raised its holdings in Cognizant Technology Solutions by 9.3% in the third quarter. Edgewood Management LLC now owns 16,915,676 shares of the information technology service provider’s stock valued at $1,227,063,000 after buying an additional 1,443,368 shares during the period. Nordea Investment Management AB raised its holdings in Cognizant Technology Solutions by 3.2% in the third quarter. Nordea Investment Management AB now owns 10,076,020 shares of the information technology service provider’s stock valued at $730,914,000 after buying an additional 313,364 shares during the period. Comgest Global Investors S.A.S. raised its holdings in Cognizant Technology Solutions by 24.5% in the third quarter. Comgest Global Investors S.A.S. now owns 7,416,617 shares of the information technology service provider’s stock valued at $538,001,000 after buying an additional 1,461,800 shares during the period. Finally, Swedbank raised its holdings in Cognizant Technology Solutions by 1.8% in the third quarter. Swedbank now owns 6,621,266 shares of the information technology service provider’s stock valued at $480,307,000 after buying an additional 116,263 shares during the period. 86.04% of the stock is currently owned by institutional investors and hedge funds.

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Cognizant Technology Solutions Company Profile

Cognizant Technology Solutions Corporation is a professional services company. The Company operates through four segments: Financial Services, Healthcare, Manufacturing/Retail/Logistics, and Other. The Financial Services segment includes customers providing banking/transaction processing, capital markets and insurance services.

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