Cognizant Technology Solutions (NASDAQ:CTSH) Stock Price Up 7.2% - Should You Buy?

Key Points

• CTSH shares rose 7.2% to about $50.42, though trading volume was significantly below average.
• Analyst sentiment remains cautious: the stock has a consensus “Hold” rating from 24 analysts, with an average price target of $61.35; several firms recently lowered their targets.
• Cognizant exceeded quarterly EPS estimates, reported 5.8% year-over-year revenue growth, and supports investors with a 2.6% dividend yield and a newly authorized $2 billion share-buyback program.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH - Get Free Report) rose 7.2% during trading on Tuesday . The company traded as high as $50.23 and last traded at $50.42. 1,472,013 shares changed hands during mid-day trading, a decline of 82% from the average daily volume of 8,176,103 shares. The stock had previously closed at $47.05.

Analyst Ratings Changes

CTSH has been the subject of several research analyst reports. Mizuho lowered their price target on Cognizant Technology Solutions from $87.00 to $68.00 and set a "neutral" rating for the company in a research report on Wednesday, May 6th. Royal Bank Of Canada set a $55.00 target price on Cognizant Technology Solutions in a report on Friday. Weiss Ratings lowered shares of Cognizant Technology Solutions from a "hold (c)" rating to a "hold (c-)" rating in a research note on Wednesday, May 13th. Citigroup dropped their price objective on shares of Cognizant Technology Solutions from $55.00 to $45.00 and set a "neutral" rating for the company in a report on Monday, July 13th. Finally, The Goldman Sachs Group set a $75.00 target price on shares of Cognizant Technology Solutions in a research note on Wednesday, April 29th. Ten analysts have rated the stock with a Buy rating and fourteen have issued a Hold rating to the company. According to data from MarketBeat, Cognizant Technology Solutions currently has a consensus rating of "Hold" and an average target price of $61.35.

Cognizant Technology Solutions Stock Up 7.5%

The firm has a market cap of $23.98 billion, a PE ratio of 11.00, a PEG ratio of 0.99 and a beta of 0.87. The company has a current ratio of 2.23, a quick ratio of 2.23 and a debt-to-equity ratio of 0.04. The firm has a 50 day moving average price of $47.05 and a 200-day moving average price of $59.25.

Cognizant Technology Solutions (NASDAQ:CTSH - Get Free Report) last issued its quarterly earnings results on Wednesday, April 29th. The information technology service provider reported $1.40 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $1.33 by $0.07. Cognizant Technology Solutions had a net margin of 10.41% and a return on equity of 17.50%. The company had revenue of $5.41 billion during the quarter, compared to the consensus estimate of $5.41 billion. During the same quarter in the previous year, the firm earned $1.23 earnings per share. The firm's quarterly revenue 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. Research analysts forecast that Cognizant Technology Solutions Corporation will post 5.7 EPS for the current fiscal year.

Cognizant Technology Solutions Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Wednesday, May 27th. Investors of record on Monday, May 18th were paid a dividend of $0.33 per share. The ex-dividend date was Monday, May 18th. This represents a $1.32 dividend on an annualized basis and a yield of 2.6%. Cognizant Technology Solutions's dividend payout ratio is currently 28.70%.

Cognizant Technology Solutions declared that its Board of Directors has initiated a stock buyback program on Monday, May 18th that allows the company to buyback $2.00 billion in outstanding shares. This buyback authorization allows the information technology service provider to repurchase up to 9% of its shares through open market purchases. Shares buyback programs are generally a sign that the company's board believes its stock is undervalued.

Hedge Funds Weigh In On Cognizant Technology Solutions

A number of hedge funds and other institutional investors have recently bought and sold shares of CTSH. Brighton Jones LLC acquired a new position in shares of Cognizant Technology Solutions during the 4th quarter worth $214,000. Geneos Wealth Management Inc. raised its holdings in shares of Cognizant Technology Solutions by 118.8% in the first quarter. Geneos Wealth Management Inc. now owns 569 shares of the information technology service provider's stock worth $44,000 after acquiring an additional 309 shares during the last quarter. Acadian Asset Management LLC purchased a new stake in shares of Cognizant Technology Solutions in the first quarter valued at $142,000. Cresset Asset Management LLC boosted its stake in shares of Cognizant Technology Solutions by 11.4% during the second quarter. Cresset Asset Management LLC now owns 9,160 shares of the information technology service provider's stock valued at $715,000 after acquiring an additional 935 shares during the last quarter. Finally, Jump Financial LLC increased its position in Cognizant Technology Solutions by 231.4% during the 2nd quarter. Jump Financial LLC now owns 29,667 shares of the information technology service provider's stock worth $2,315,000 after purchasing an additional 20,716 shares in the last quarter. 92.44% of the stock is currently owned by hedge funds and other institutional investors.

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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