Cognizant Technology Solutions (NASDAQ:CTSH) Reaches New 52-Week Low After Analyst Downgrade

Key Points

• Cognizant Technology Solutions (NASDAQ: CTSH) hit a new 52-week low after Daiwa Securities Group cut its price target sharply from $65 to $42 and kept a neutral rating.
• Shares fell to as low as $40.56, reflecting broad analyst caution; the stock now has an average Hold rating with an average target price of $70.35, even though 10 analysts still rate it a Buy.
• The company recently beat quarterly EPS estimates and continues to return cash to shareholders through a $0.33 quarterly dividend and a newly authorized $2 billion share repurchase program.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH - Get Free Report) shares hit a new 52-week low during trading on Thursday after Daiwa Securities Group lowered their price target on the stock from $65.00 to $42.00. Daiwa Securities Group currently has a neutral rating on the stock. Cognizant Technology Solutions traded as low as $40.56 and last traded at $40.5870, with a volume of 1970813 shares. The stock had previously closed at $41.44.

CTSH has been the topic of a number of other reports. Wells Fargo & Company dropped their price target on Cognizant Technology Solutions from $98.00 to $83.00 and set an "overweight" rating on the stock in a research report on Thursday, April 30th. Robert W. Baird set a $72.00 target price on Cognizant Technology Solutions and gave the stock a "neutral" rating in a report on Friday, April 10th. HSBC dropped their price target on shares of Cognizant Technology Solutions from $98.00 to $80.00 in a research note on Thursday, April 30th. Susquehanna reduced their price objective on shares of Cognizant Technology Solutions from $98.00 to $88.00 and set a "positive" rating for the company in a research note on Friday, May 1st. Finally, The Goldman Sachs Group set a $75.00 target price on shares of Cognizant Technology Solutions in a report on Wednesday, April 29th. Ten investment analysts have rated the stock with a Buy rating and fourteen have given a Hold rating to the stock. According to data from MarketBeat.com, the stock presently has an average rating of "Hold" and an average target price of $70.35.

Institutional Investors Weigh In On Cognizant Technology Solutions

Several institutional investors have recently modified their holdings of CTSH. Checchi Capital Advisers LLC raised its position in Cognizant Technology Solutions by 3.4% in the 4th quarter. Checchi Capital Advisers LLC now owns 3,852 shares of the information technology service provider's stock worth $320,000 after buying an additional 127 shares during the last quarter. Unison Advisors LLC grew its stake in shares of Cognizant Technology Solutions by 0.5% in the fourth quarter. Unison Advisors LLC now owns 30,095 shares of the information technology service provider's stock worth $2,498,000 after acquiring an additional 138 shares during the period. TD Waterhouse Canada Inc. grew its stake in shares of Cognizant Technology Solutions by 7.2% in the fourth quarter. TD Waterhouse Canada Inc. now owns 2,130 shares of the information technology service provider's stock worth $177,000 after acquiring an additional 143 shares during the period. Security National Bank of SO Dak raised its holdings in shares of Cognizant Technology Solutions by 0.6% during the second quarter. Security National Bank of SO Dak now owns 24,635 shares of the information technology service provider's stock valued at $1,922,000 after purchasing an additional 150 shares during the last quarter. Finally, Cidel Asset Management Inc. lifted its position in Cognizant Technology Solutions by 3.0% during the fourth quarter. Cidel Asset Management Inc. now owns 5,535 shares of the information technology service provider's stock valued at $459,000 after purchasing an additional 163 shares during the period. 92.44% of the stock is owned by hedge funds and other institutional investors.

Cognizant Technology Solutions Stock Down 2.4%

The company has a quick ratio of 2.23, a current ratio of 2.23 and a debt-to-equity ratio of 0.04. The company's fifty day moving average is $52.28 and its 200-day moving average is $65.88. The company has a market cap of $19.18 billion, a PE ratio of 8.79, a PEG ratio of 0.86 and a beta of 0.81.

Cognizant Technology Solutions (NASDAQ:CTSH - Get Free Report) last announced its earnings results on Wednesday, April 29th. The information technology service provider reported $1.40 earnings per share for the quarter, beating analysts' consensus estimates of $1.33 by $0.07. The business had revenue of $5.41 billion during the quarter, compared to analyst estimates of $5.41 billion. Cognizant Technology Solutions had a net margin of 10.41% and a return on equity of 17.50%. The company's quarterly revenue was up 5.8% compared to the same quarter last year. During the same period in the previous year, the business earned $1.23 EPS. Cognizant Technology Solutions has set its FY 2026 guidance at 5.630-5.770 EPS. On average, analysts predict that Cognizant Technology Solutions Corporation will post 5.7 EPS for the current year.

Cognizant Technology Solutions Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Wednesday, May 27th. Shareholders of record on Monday, May 18th were issued a $0.33 dividend. The ex-dividend date of this dividend was Monday, May 18th. This represents a $1.32 dividend on an annualized basis and a yield of 3.3%. Cognizant Technology Solutions's dividend payout ratio is currently 28.70%.

Cognizant Technology Solutions declared that its board has authorized a share repurchase plan on Monday, May 18th that permits the company to repurchase $2.00 billion in outstanding shares. This repurchase authorization permits the information technology service provider to reacquire up to 9% of its shares through open market purchases. Shares repurchase plans are typically an indication that the company's board believes its shares are undervalued.

About Cognizant Technology Solutions

Cognizant Technology Solutions NASDAQ: CTSH is a global professional services company that provides information technology, consulting and business process services to large enterprises. Its core offerings include digital engineering, application development and maintenance, cloud migration and managed services, data analytics and artificial intelligence, cybersecurity, and industry-specific solutions. Cognizant works with clients to design and implement technology-enabled transformations that address customer experience, operational efficiency and new product and service delivery.

Founded in the 1990s and headquartered in Teaneck, New Jersey, Cognizant has grown into a multinational organization with delivery centers and operations across the Americas, Europe, and Asia.

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