Investors Buy High Volume of Cognizant Technology Solutions Call Options (NASDAQ:CTSH)

Key Points

• Cognizant call-option activity surged: Investors bought 10,781 call options, 130% above the average volume of 4,682, signaling heightened interest in the stock.
• Shares rose to $69.15 during Wednesday trading, while institutional investors owned 92.44% of the company. The stock’s valuation included a 14.87 price-to-earnings ratio and a 1.9% dividend yield.
• Analyst sentiment remains mixed: Ten analysts rate Cognizant a Buy, 13 recommend Hold and one recommends Sell, producing a consensus Hold rating and an average price target of $64.70.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH - Get Free Report) was the recipient of unusually large options trading activity on Wednesday. Stock investors bought 10,781 call options on the stock. This represents an increase of 130% compared to the average volume of 4,682 call options.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the stock. Marquette Asset Management LLC increased its position in Cognizant Technology Solutions by 183.9% during the 3rd quarter. Marquette Asset Management LLC now owns 545 shares of the information technology service provider's stock worth $31,000 after purchasing an additional 353 shares in the last quarter. Signature Equity Partners LLC raised its holdings in Cognizant Technology Solutions by 102.4% during the first quarter. Signature Equity Partners LLC now owns 599 shares of the information technology service provider's stock worth $37,000 after buying an additional 303 shares during the last quarter. Pension & Wealth Management Advisors Inc. bought a new stake in Cognizant Technology Solutions during the third quarter worth $35,000. Alpine Bank Wealth Management bought a new position in shares of Cognizant Technology Solutions in the third quarter valued at approximately $38,000. Finally, SJS Investment Consulting Inc. raised its holdings in shares of Cognizant Technology Solutions by 1,580.0% in the 1st quarter. SJS Investment Consulting Inc. now owns 840 shares of the information technology service provider's stock worth $52,000 after purchasing an additional 790 shares during the period. Institutional investors own 92.44% of the company's stock.

Cognizant Technology Solutions Price Performance

Shares of NASDAQ CTSH traded up $0.97 during midday trading on Wednesday, reaching $69.15. The company's stock had a trading volume of 2,740,752 shares, compared to its average volume of 7,941,768. The company has a 50 day moving average price of $60.83 and a 200 day moving average price of $54.50. The company has a current ratio of 2.18, a quick ratio of 2.18 and a debt-to-equity ratio of 0.11. The company has a market cap of $31.15 billion, a price-to-earnings ratio of 14.87, a price-to-earnings-growth ratio of 1.25 and a beta of 0.86. Cognizant Technology Solutions has a one year low of $37.08 and a one year high of $87.03.

Cognizant Technology Solutions (NASDAQ:CTSH - Get Free Report) last released its earnings results on Wednesday, July 29th. The information technology service provider reported $1.37 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $1.38 by ($0.01). The business had revenue of $5.48 billion during the quarter, compared to analysts' expectations of $5.48 billion. Cognizant Technology Solutions had a net margin of 10.26% and a return on equity of 17.70%. Cognizant Technology Solutions's revenue for the quarter was up 4.5% on a year-over-year basis. During the same quarter in the previous year, the company earned $1.31 EPS. Cognizant Technology Solutions has set its FY 2026 guidance at 5.700-5.820 EPS. On average, equities research analysts expect that Cognizant Technology Solutions will post 5.74 EPS for the current year.

Cognizant Technology Solutions Announces Dividend

The firm also recently declared a quarterly dividend, which was paid on Tuesday, August 25th. Shareholders of record on Tuesday, August 18th were given a $0.33 dividend. This represents a $1.32 annualized dividend and a yield of 1.9%. The ex-dividend date of this dividend was Tuesday, August 18th. Cognizant Technology Solutions's payout ratio is currently 28.39%.

Analyst Ratings Changes

A number of equities research analysts have commented on the stock. Nomura dropped their price objective on shares of Cognizant Technology Solutions from $93.00 to $74.00 and set a "buy" rating on the stock in a research report on Wednesday, July 1st. Susquehanna set a $82.00 target price on shares of Cognizant Technology Solutions and gave the stock a "positive" rating in a research report on Thursday, July 30th. HSBC decreased their price objective on Cognizant Technology Solutions from $80.00 to $68.00 and set a "buy" rating on the stock in a research note on Wednesday, July 1st. Daiwa Securities Group increased their target price on Cognizant Technology Solutions from $42.00 to $60.00 and gave the stock a "neutral" rating in a research report on Friday, September 25th. Finally, Deutsche Bank Aktiengesellschaft reaffirmed a "buy" rating and set a $70.00 price target (up from $65.00) on shares of Cognizant Technology Solutions in a report on Friday, September 18th. Ten investment analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and one has assigned a Sell rating to the company. According to data from MarketBeat, the stock currently has a consensus rating of "Hold" and an average target price of $64.70.

Cognizant Technology Solutions Company Profile

Cognizant Technology Solutions Corporation is a global information technology services and consulting company that helps organizations modernize their technology infrastructure, operations and customer experiences. The company serves businesses across industries including financial services, healthcare, life sciences, manufacturing, retail and communications.

Cognizant's services include consulting, application development and modernization, cloud computing, data and artificial intelligence, digital engineering, cybersecurity and business process services.

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