Cognizant Technology Solutions (NASDAQ:CTSH) Shares Gap Down on Analyst Downgrade

Key Points

• Cognizant Technology Solutions shares gapped down after Citigroup cut its price target from $55 to $45, while keeping a neutral rating. The stock opened below its prior close of $44.16 and last traded around $43.10.
• Several other analysts have also trimmed their outlooks, and the stock now has a consensus Hold rating with an average target price of $64.26. Overall, 11 analysts rate it Buy and 14 rate it Hold.
• The company recently reported better-than-expected quarterly earnings of $1.40 per share and revenue of $5.41 billion, and it also pays a quarterly dividend and has authorized a $2 billion share buyback.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH - Get Free Report) shares gapped down prior to trading on Tuesday after Citigroup lowered their price target on the stock from $55.00 to $45.00. The stock had previously closed at $44.16, but opened at $41.71. Citigroup currently has a neutral rating on the stock. Cognizant Technology Solutions shares last traded at $43.0990, with a volume of 979,085 shares traded.

CTSH has been the subject of a number of other reports. Weiss Ratings cut shares of Cognizant Technology Solutions from a "hold (c)" rating to a "hold (c-)" rating in a report on Wednesday, May 13th. Evercore reduced their price objective on Cognizant Technology Solutions from $100.00 to $70.00 in a research note on Thursday, April 30th. HSBC decreased their target price on Cognizant Technology Solutions from $80.00 to $68.00 and set a "buy" rating on the stock in a report on Wednesday, July 1st. Jefferies Financial Group reduced their target price on Cognizant Technology Solutions from $80.00 to $65.00 and set a "buy" rating for the company in a report on Monday, May 4th. Finally, Daiwa Securities Group decreased their price target on Cognizant Technology Solutions from $65.00 to $42.00 and set a "neutral" rating for the company in a research report on Wednesday, June 24th. Eleven analysts have rated the stock with a Buy rating and fourteen have issued a Hold rating to the stock. According to MarketBeat, the company presently has a consensus rating of "Hold" and an average target price of $64.26.

Hedge Funds Weigh In On Cognizant Technology Solutions

A number of large investors have recently made changes to their positions in CTSH. JPL Wealth Management LLC purchased a new position in Cognizant Technology Solutions during the third quarter valued at approximately $25,000. Lodestone Wealth Management LLC acquired a new stake in shares of Cognizant Technology Solutions during the 4th quarter valued at $28,000. Flagship Harbor Advisors LLC acquired a new stake in shares of Cognizant Technology Solutions during the 4th quarter valued at $28,000. Physician Wealth Advisors Inc. grew its holdings in shares of Cognizant Technology Solutions by 165.1% during the 4th quarter. Physician Wealth Advisors Inc. now owns 342 shares of the information technology service provider's stock valued at $28,000 after acquiring an additional 213 shares in the last quarter. Finally, Prosperity Bancshares Inc acquired a new position in shares of Cognizant Technology Solutions in the fourth quarter worth $29,000. Institutional investors and hedge funds own 92.44% of the company's stock.

Cognizant Technology Solutions Price Performance

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 stock's 50 day moving average price is $48.09 and its two-hundred day moving average price is $62.04. The firm has a market capitalization of $20.39 billion, a price-to-earnings ratio of 9.36, a P/E/G ratio of 0.90 and a beta of 0.87.

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

Cognizant Technology Solutions Announces Dividend

The company also recently declared a quarterly dividend, which was paid on Wednesday, May 27th. Investors of record on Monday, May 18th were paid a $0.33 dividend. The ex-dividend date of this dividend was Monday, May 18th. This represents a $1.32 annualized dividend and a dividend yield of 3.1%. Cognizant Technology Solutions's payout ratio is presently 28.70%.

Cognizant Technology Solutions announced that its Board of Directors has approved a stock buyback plan on Monday, May 18th that permits the company to repurchase $2.00 billion in shares. This repurchase authorization permits the information technology service provider to buy up to 9% of its shares through open market purchases. Shares repurchase plans are generally an indication that the company's board believes its stock is 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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