Cognizant Technology Solutions (NASDAQ:CTSH) Shares Gap Up - Should You Buy?

Key Points

• Cognizant shares surged, opening at $61.90 versus a prior close of $57.44 and last trading near $64.09.
• Analyst sentiment is mixed but leans positive: Wedbush upgraded the stock to “outperform,” while the consensus rating remains “Hold” with an average price target of $64.43.
• The company reported $1.37 in quarterly EPS, slightly below estimates, while revenue matched expectations at $5.48 billion; it also declared a quarterly dividend of $0.33 per share, yielding about 2.1% annually.

Shares of Cognizant Technology Solutions Corporation (NASDAQ:CTSH - Get Free Report) gapped up prior to trading on Thursday. The stock had previously closed at $57.44, but opened at $61.90. Cognizant Technology Solutions shares last traded at $64.0910, with a volume of 2,976,761 shares traded.

Analyst Upgrades and Downgrades

Several research firms recently commented on CTSH. Wedbush upgraded Cognizant Technology Solutions from a "neutral" rating to an "outperform" rating and boosted their target price for the stock from $56.00 to $70.00 in a research report on Monday, June 8th. HSBC dropped their price target on Cognizant Technology Solutions from $80.00 to $68.00 and set a "buy" rating for the company in a research report on Wednesday, July 1st. Nomura cut their price objective on Cognizant Technology Solutions from $93.00 to $74.00 and set a "buy" rating for the company in a report on Wednesday, July 1st. JPMorgan Chase & Co. lowered their target price on shares of Cognizant Technology Solutions from $74.00 to $55.00 and set an "overweight" rating on the stock in a research note on Friday, July 24th. Finally, Robert W. Baird set a $68.00 price target on shares of Cognizant Technology Solutions in a research note on Thursday, July 30th. Ten equities research analysts have rated the stock with a Buy rating, thirteen have given a Hold rating and one has issued a Sell rating to the stock. According to MarketBeat.com, Cognizant Technology Solutions currently has an average rating of "Hold" and an average target price of $64.43.

Cognizant Technology Solutions Price Performance

The business has a fifty day moving average price of $58.60 and a 200-day moving average price of $54.44. 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 stock has a market capitalization of $27.66 billion, a PE ratio of 13.18, a PEG ratio of 1.06 and a beta of 0.83.

Cognizant Technology Solutions (NASDAQ:CTSH - Get Free Report) last announced its quarterly earnings data on Wednesday, July 29th. The information technology service provider reported $1.37 EPS for the quarter, missing the consensus estimate of $1.38 by ($0.01). The firm had revenue of $5.48 billion for the quarter, compared to the consensus estimate 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% compared to the same quarter last year. During the same quarter last year, the company posted $1.31 earnings per share. Cognizant Technology Solutions has set its FY 2026 guidance at 5.700-5.820 EPS. Research analysts expect that Cognizant Technology Solutions Corporation will post 5.74 EPS for the current fiscal year.

Cognizant Technology Solutions Dividend Announcement

The firm also recently declared a quarterly dividend, which was paid on Tuesday, August 25th. Shareholders of record on Tuesday, August 18th were paid a dividend of $0.33 per share. The ex-dividend date of this dividend was Tuesday, August 18th. This represents a $1.32 annualized dividend and a dividend yield of 2.1%. Cognizant Technology Solutions's dividend payout ratio (DPR) is 28.39%.

Institutional Investors Weigh In On Cognizant Technology Solutions

A number of institutional investors have recently made changes to their positions in CTSH. Reflection Asset Management bought a new stake in Cognizant Technology Solutions in the fourth quarter worth $40,000. MV Capital Management Inc. bought a new position in shares of Cognizant Technology Solutions during the fourth quarter valued at about $42,000. Signature Equity Partners LLC increased its holdings in shares of Cognizant Technology Solutions by 102.4% in 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 period. Root Financial Partners LLC increased its holdings in shares of Cognizant Technology Solutions by 26.8% in the fourth quarter. Root Financial Partners LLC now owns 780 shares of the information technology service provider's stock worth $65,000 after buying an additional 165 shares during the period. Finally, SJS Investment Consulting Inc. lifted its stake 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 valued at $52,000 after acquiring an additional 790 shares during the last quarter. Hedge funds and other institutional investors own 92.44% of the company's stock.

Cognizant Technology Solutions Company Profile

Cognizant Technology Solutions Corporation NASDAQ: CTSH is a global professional services and information technology company that helps businesses modernize their operations and technology infrastructure. Its services include IT consulting, systems integration, application development and modernization, cloud computing, data and analytics, artificial intelligence, cybersecurity, and digital engineering.

The company also provides business process services and industry-specific solutions for sectors such as financial services, healthcare, life sciences, manufacturing, retail, communications, and information technology.

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