Cognizant Raised to Buy Rating at Citi

Cognizant Technology Solutions Corporation, listed on NASDAQ:CTSH, is a leading provider of IT services, consulting, and business process outsourcing. The company operates globally, with a strong presence in North America. Cognizant competes with other major IT service providers like Accenture and Infosys. On October 29, 2025, Cognizant reported impressive financial results for the third quarter.

Cognizant's earnings per share (EPS) reached $1.39, surpassing the estimated $1.29. This 11% year-over-year increase in adjusted EPS highlights the company's strong performance despite a decline in GAAP EPS to $0.56 due to a one-time, non-cash income tax expense of $0.80. The company's revenue of $5.42 billion exceeded expectations and marked a 7.4% increase from the previous year.

The company's operating margin improved to 16.0%, a 140 basis point increase from the previous year. The adjusted operating margin also rose by 70 basis points, reflecting efficient cost management. Cognizant's trailing 12-month bookings reached $27.5 billion, a 5% increase from the previous year, indicating strong demand for its services.

Cognizant has returned $1.5 billion to shareholders through share repurchases and dividends in 2025, with plans to return $2 billion by year-end. The company raised its 2025 constant currency revenue growth guidance to 6.0%-6.3%, surpassing prior guidance. The adjusted operating margin guidance for 2025 is now approximately 15.7%, a 40 basis point expansion year-over-year.

CEO Ravi Kumar S emphasized the company's strategic focus on AI-led platforms and intellectual property, which is expected to drive future growth. Cognizant's financial metrics, such as a P/E ratio of 13.70 and a low debt-to-equity ratio of 0.077, indicate a strong financial position. The current ratio of 2.41 suggests robust liquidity, ensuring the company can meet its short-term obligations.

• Morgan Stanley upgraded NASDAQ:CTSH to "Overweight" with a stock price of $86.20.
• Cognizant reported non-GAAP earnings of $1.21 per share, surpassing estimates and indicating a positive profitability trend.
• The company's revenues reached $5.08 billion, with a year-over-year growth of 6.8%, driven by demand for digital transformation services and AI integration.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is a leading provider of IT services, including digital transformation, AI integration, and sector-specific solutions. The company competes with other tech giants like Accenture and Infosys. On February 10, 2025, Morgan Stanley upgraded CTSH to "Overweight," with the stock priced at $86.20 at the time of the announcement.

Cognizant's recent financial performance has been strong. In the fourth quarter of 2024, the company reported non-GAAP earnings of $1.21 per share, surpassing the Zacks Consensus Estimate by 8.04% and marking a 2.5% increase from the previous year. This indicates a positive trend in the company's profitability.

The company's revenues for the same quarter reached $5.08 billion, exceeding expectations by 0.49% and showing a 6.8% year-over-year growth. This growth was driven by strong demand for digital transformation services and AI integration. Acquisitions also played a significant role, contributing 450 basis points to the top-line growth.

Cognizant's bookings over the trailing 12 months rose by 3% year over year to $27.1 billion, with a book-to-bill ratio of approximately 1.4 times. This ratio indicates that the company is securing more business than it is delivering, which is a positive sign for future revenue. The company secured 10 large deals during the quarter, an increase from seven in the previous year, totaling 29 large deals for the year.

Currently, CTSH is trading at $86.20, reflecting a decrease of 1.02% or $0.89. The stock has traded between a low of $85.80 and a high of $87.35 today. Over the past year, CTSH has reached a high of $87.61 and a low of $63.79. The company has a market capitalization of approximately $42.74 billion, with a trading volume of 3,837,233 shares on the NASDAQ exchange.

• Morgan Stanley upgraded NASDAQ:CTSH to "Overweight" with a stock price of $86.20.
• Cognizant reported non-GAAP earnings of $1.21 per share, surpassing estimates and indicating a positive profitability trend.
• The company's revenues reached $5.08 billion, with a year-over-year growth of 6.8%, driven by demand for digital transformation services and AI integration.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is a leading provider of IT services, including digital transformation, AI integration, and sector-specific solutions. The company competes with other tech giants like Accenture and Infosys. On February 10, 2025, Morgan Stanley upgraded CTSH to "Overweight," with the stock priced at $86.20 at the time of the announcement.

Cognizant's recent financial performance has been strong. In the fourth quarter of 2024, the company reported non-GAAP earnings of $1.21 per share, surpassing the Zacks Consensus Estimate by 8.04% and marking a 2.5% increase from the previous year. This indicates a positive trend in the company's profitability.

The company's revenues for the same quarter reached $5.08 billion, exceeding expectations by 0.49% and showing a 6.8% year-over-year growth. This growth was driven by strong demand for digital transformation services and AI integration. Acquisitions also played a significant role, contributing 450 basis points to the top-line growth.

Cognizant's bookings over the trailing 12 months rose by 3% year over year to $27.1 billion, with a book-to-bill ratio of approximately 1.4 times. This ratio indicates that the company is securing more business than it is delivering, which is a positive sign for future revenue. The company secured 10 large deals during the quarter, an increase from seven in the previous year, totaling 29 large deals for the year.

Currently, CTSH is trading at $86.20, reflecting a decrease of 1.02% or $0.89. The stock has traded between a low of $85.80 and a high of $87.35 today. Over the past year, CTSH has reached a high of $87.61 and a low of $63.79. The company has a market capitalization of approximately $42.74 billion, with a trading volume of 3,837,233 shares on the NASDAQ exchange.

James Faucette from Morgan Stanley has recently set a price target of $65 for Cognizant (CTSH), suggesting a potential downside from its current trading price of $69.26. This analysis, as reported by StreetInsider, points towards a cautious outlook on Cognizant's financial future, citing "Discretionary Spending Still Challenged; Bookings Strength Intact" as a key factor. Despite this cautious stance, Cognizant's strategic moves in the retail sector and its partnerships with Shopify and Google Cloud indicate a robust plan to counteract these challenges and leverage growth opportunities.

Cognizant's Strategic Partnerships

Cognizant's partnership with Shopify and Google Cloud is a strategic endeavor to modernize and transform the digital landscape for global retailers and brands. By combining Shopify's commerce platform, Google Cloud's infrastructure, and Cognizant's expertise in retail technology, this alliance aims to enhance customer experiences and ensure global scalability. This initiative is particularly significant as it focuses on adopting new technologies like generative AI, which are essential for meeting the evolving demands of consumers for real-time interactions and personalized shopping experiences. This move not only demonstrates Cognizant's commitment to innovation but also positions the company to capitalize on the growing trend of digital transformation in the retail industry.

Growth and Partnership Network

Cognizant's growth is further supported by its expanding client base and a strong partnership network. The company has reported a robust pipeline of business renewals and new opportunities, including securing several deals worth over $100 million each in the fourth quarter of 2023. This large deal momentum is a testament to Cognizant's competitive edge and its ability to attract significant business engagements, which are crucial for sustaining growth and profitability.

Extension of Partnership with LexisNexis

The extension of Cognizant's partnership with LexisNexis Legal & Professional underscores the company's role as a trusted provider of advanced cloud and digital engineering services. This collaboration aims to transform Lexis Nexis' legal research platform, Lexis+, by enhancing search capabilities and elevating the customer experience. Such strategic partnerships not only diversify Cognizant's service offerings but also reinforce its position in the market as a leader in delivering innovative digital solutions.

Financial Health and Market Position

Despite the current trading price of $69.26 and a recent decrease of $1.31, indicating a decline of approximately 1.86%, Cognizant's strategic initiatives and partnerships highlight the company's proactive approach to navigating market challenges and seizing growth opportunities. With a market capitalization of around $34.48 billion and a trading volume of 2,760,678 shares on the NASDAQ exchange, Cognizant's financial health and strategic direction suggest a resilient outlook, even in the face of potential market downturns as indicated by Morgan Stanley's analysis.

Citi analysts upgraded Cognizant (NASDAQ:CTSH) to Buy rating from Neutral and raised the price target to $80 from $72. The analysts pointed out that Cognizant has made significant progress on various fronts, particularly under the leadership of new CEO Ravi Kumar. This positive change has improved Cognizant's reputation with both clients and employees, sparking steady and incremental investor interest in what they call a "idiosyncratic, self-help story."

The analysts also highlighted Cognizant's efforts to narrow the performance gap on both the demand and supply sides of the business. They cited strong year-to-date bookings and improved client and employee retention as early indicators that Cognizant can compete effectively with its main competitors as the industry recovers.

Citi analysts upgraded Cognizant (NASDAQ:CTSH) to Buy rating from Neutral and raised the price target to $80 from $72. The analysts pointed out that Cognizant has made significant progress on various fronts, particularly under the leadership of new CEO Ravi Kumar. This positive change has improved Cognizant's reputation with both clients and employees, sparking steady and incremental investor interest in what they call a "idiosyncratic, self-help story."

The analysts also highlighted Cognizant's efforts to narrow the performance gap on both the demand and supply sides of the business. They cited strong year-to-date bookings and improved client and employee retention as early indicators that Cognizant can compete effectively with its main competitors as the industry recovers.