Group 1: Core Insights - Investors in the Computers - IT Services sector should consider Cognizant (CTSH) and Epam (EPAM) for potential value opportunities [1] - The Zacks Rank system identifies stocks with positive earnings estimate revisions, which is crucial for value investors [2][3] Group 2: Valuation Metrics - Cognizant has a Zacks Rank of 2 (Buy), indicating an improving earnings outlook, while Epam has a Zacks Rank of 3 (Hold) [3][7] - CTSH has a forward P/E ratio of 15.28, compared to EPAM's forward P/E of 15.96, suggesting CTSH may be more attractively priced [5] - The PEG ratio for CTSH is 1.77, while EPAM's PEG ratio is 1.79, indicating similar growth expectations [5] - CTSH's P/B ratio is 2.57, while EPAM's P/B ratio is 2.73, further supporting the valuation advantage of CTSH [6] Group 3: Value Grades - Based on the valuation metrics, CTSH has earned a Value grade of B, while EPAM has a Value grade of C, indicating a stronger value proposition for CTSH [6]

Core Insights - The article emphasizes the importance of shareholder yield as a metric for long-term investors, combining dividend yield, share buybacks, and net debt reduction to assess how effectively a company returns capital to shareholders [2][4][5] Shareholder Yield Components - Dividends provide a steady income stream and signal management's confidence in financial health, contributing significantly to total equity returns, especially in sideways or bear markets [3] - Share buybacks reduce share count, enhancing per-share metrics like earnings and cash flow, which is particularly beneficial in low-growth environments [3] - Debt reduction improves balance sheet strength, reducing default risk and enhancing resilience during economic downturns, benefiting investors through improved financial positioning [4] Investment Opportunities - Companies with high shareholder yield, such as RITHM Capital Corp (RITM), Cognizant Technology Solutions (CTSH), Lam Research (LRCX), and McKesson (MCK), are highlighted as attractive options for income and capital appreciation [4][10][13][15][18] - RITM offers a competitive dividend yield of approximately 8.92%, with a history of increasing dividends and reducing long-term debt from $27.19 billion in 2020 to $18.6 billion in 2024 [8][10] - Cognizant has a dividend yield of 1.64%, with a payout ratio of 26% and a focus on reducing long-term debt from $663 million in 2020 to $567 million in 2024 [12][13] - Lam Research provides a dividend yield of around 1%, with a payout ratio of 25% and a reduction in long-term debt from $4.97 billion in 2020 to $3.73 billion in 2024 [14][15] - McKesson has a dividend yield of approximately 0.39%, with a payout ratio of 9% and a reduction in long-term debt from $14.47 billion in 2021 to $10.06 billion in 2024 [17][18] Performance and Rankings - RITM currently holds a Zacks Rank 1 (Strong Buy) and a Zacks Value Score of 'B', indicating strong upside potential [11] - Cognizant has a Zacks Rank 2 (Buy) and a Zacks Value Score of 'B', suggesting solid prospects [13] - Lam Research carries a Zacks Rank of 2 and a Zacks Value Score of 'C', indicating good potential [16] - McKesson has a Zacks Rank 2 and a Zacks Value Score of 'A', implying strong prospects for the stock [19]

Core Insights - Cognizant has been announced as a Founding Partner for the 2025 Newsweek AI Impact Summit, emphasizing its commitment to guiding organizations through AI disruptions [1][2] - The Summit will take place from June 23 to June 25, 2025, in Sonoma, California, and will gather global leaders to discuss AI's impact on business and society [1][3] Company Involvement - Cognizant's role as a Founding Partner reflects a shared vision for responsible and strategic AI implementation across various sectors [2] - The partnership highlights Cognizant's ongoing investment in assisting enterprises to navigate technological shifts effectively [2][3] Summit Details - The Newsweek AI Impact Summit aims to facilitate essential dialogue on the ethical, practical, and transformative implications of AI, featuring C-suite executives, policymakers, and tech pioneers [3][4] - Featured topics at the Summit include the impact of AI in healthcare, responsible AI implementation, and AI's role in enterprise transformation [6]

Core Insights - Cognizant (CTSH) and Epam (EPAM) are two stocks in the Computers - IT Services sector, with a comparison being made to determine which offers better value for investors [1] Valuation Metrics - CTSH has a forward P/E ratio of 15.96, while EPAM has a forward P/E of 16.84 [5] - CTSH's PEG ratio is 1.85, compared to EPAM's PEG ratio of 1.89, indicating similar expected earnings growth rates [5] - CTSH's P/B ratio is 2.68, while EPAM's P/B ratio is 2.83, suggesting that CTSH is relatively more undervalued [6] Zacks Rank and Style Scores - CTSH has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while EPAM has a Zacks Rank of 3 (Hold) [3] - CTSH has a Value grade of B, whereas EPAM has a Value grade of C, suggesting that CTSH is viewed more favorably by value investors [6]

Summary of Cognizant Technology Solutions (CTSH) Conference Call Company Overview - **Company**: Cognizant Technology Solutions (CTSH) - **Date**: June 11, 2025 - **Key Speaker**: Jatin Dalal, Chief Financial Officer Key Points Recent Business Developments - Cognizant announced two mega deals valued at over $500 million each, adding to a previous mega deal signed in Q1, totaling three mega deals for the year [2][3] - The recent deals are primarily consolidation deals, increasing wallet share from existing customers, with a significant renewal component [4] Industry Focus - One mega deal is in the technology and communication sector, while the other is in the health sector [5] AI Integration - AI is a core component of the new mega deals, enhancing productivity and differentiating Cognizant from competitors [6] - The company has defined three vectors of AI impact, with the first vector focusing on productivity improvements [6] Competitive Factors - Successful execution of previous deals and compelling deal architecture were key factors in winning the recent mega deals [8][9] - Price considerations also played a role, with initial lower margins expected to recover over the life of the deals [9][10] Revenue and Margin Guidance - The recent mega deals were factored into revenue guidance, with expectations of 20 to 40 basis points margin expansion through 2025 [10][11] Pipeline and Deal Dynamics - Winning large deals reduces the pipeline temporarily, but Cognizant expects to replenish it with new opportunities [12][13] - Smaller deals (under $50 million) saw a decline in 2023, but stability was noted in 2024, with some momentum returning in Q4 [15][16] Client Spending Behavior - Discretionary spending is expected to rebound when economic stability returns, as clients have delayed IT investments [18][19] - The BFSI (Banking, Financial Services, and Insurance) sector is currently driving discretionary spending, particularly on compliance-related projects [24] Sector-Specific Insights - The BFSI sector is focusing on compliance changes and preparing for AI integration, while manufacturing and retail are cautious due to regulatory uncertainties [22][27] - Health sector clients are also impacted by policy uncertainties, affecting their IT spending decisions [26] AI as a Growth Driver - AI is viewed as the next significant growth driver for the IT services industry, with Cognizant positioning itself as a leader in this space [29] - The company is investing in AI solutions to enhance customer productivity and reimagine business operations [29][32] Future Revenue Model - The revenue model is expected to evolve, incorporating pricing for both human and virtual agents, indicating a shift towards non-linear revenue growth [42][43] M&A Strategy - Cognizant allocates 50% of its cash flow for M&A, with a focus on acquiring capabilities in AI, digital engineering, and analytics [50][51] - The company aims to leverage M&A to fill market gaps and enhance organic growth [51] Conclusion - Cognizant is optimistic about its future growth prospects, driven by successful mega deals, AI integration, and a strategic approach to M&A, while navigating current economic uncertainties and client spending behaviors [52]

Summary of Cognizant Technology Solutions (CTSH) Conference Call Company Overview - **Company**: Cognizant Technology Solutions (CTSH) - **Event**: 2025 Conference - **Date**: June 04, 2025 Key Points Historical Perspective and Organizational Changes - **Leadership Change**: Ravi took over as CEO two and a half years ago, leading to significant organizational changes [2][4] - **Core Values**: Cognizant is anchored on four key pillars: agility, entrepreneurial culture, empowerment, and these values have remained constant [5][6] - **Growth Adjustments**: The company overcorrected its processes between 2015 and 2020, leading to rigidity perceived by clients and associates [6][7] - **Current State**: The company is now recalibrating towards a balanced approach, regaining client and associate satisfaction [8] Macro Environment - **Current Macro Dynamics**: The current macro environment is characterized by uncertainty and change, particularly due to AI disruptions across enterprises [10][11] - **Comparison with Past Crises**: Each crisis has unique nuances, but the common factor is the uncertainty they induce [10] Market Segments and Customer Demand - **Financial Services**: This segment is showing signs of recovery with discretionary spending beginning to return, though not fully [12][13] - **Healthcare**: Characterized as cautious due to government spending discussions, particularly on Medicare and Medicaid [13][14] - **Life Sciences**: Facing anxiety due to tariff uncertainties, leading to caution in spending [14] - **Products and Resources**: This segment is dealing with tariff turbulence affecting IT projects [15] - **Communications, Media, and Technology (CMT)**: Currently neutral with no significant changes in spending patterns [15] Deal Activity - **Large Deals**: Cognizant closed 29 large deals (over $100 million) last year, up from 17 the previous year [20][21] - **Mega Deals**: The company has closed three mega deals (over $500 million) by the end of Q2, including a significant deal in health sciences worth approximately $1 billion [22][23] - **Deal Structure**: The approach involves unlocking trapped value in existing contracts to fund AI-driven transformations [23][28] AI Integration and Pricing Models - **AI Utilization**: Currently, 20% of code is generated by AI tools, with expectations to increase to 50% in the coming years [31][32] - **Pricing Environment**: The pricing environment is competitive but stable, with a shift towards outcome-based pricing expected as clients adapt to AI productivity gains [36][40] Financial Services Recovery - **Structural Changes**: Cognizant has focused on sub-segment levels within financial services, revamped its sales engine, and tailored solutions powered by AI [50][52] - **Market Share Recovery**: The company is regaining market share and winning discretionary spending as the market stabilizes [54] Vendor Consolidation Trends - **Client Behavior**: Clients are focusing on cost optimization rather than vendor consolidation, seeking to break silos and consolidate vendors for maximum value [55] Additional Insights - **Client Engagement**: Cognizant is proactively engaging clients with AI solutions to unlock productivity and drive transformation [26][27] - **Long-term Deal Duration**: The average tenure for mega deals is around five years [46] This summary encapsulates the key insights and developments discussed during the conference call, highlighting Cognizant's strategic direction, market dynamics, and operational adjustments in response to evolving client needs and macroeconomic conditions.

Group 1 - Cognizant will present at the Nasdaq Investor Conference in partnership with Jefferies on June 11, 2025 [1] - The presentation will be led by Jatin Dalal, the Chief Financial Officer of Cognizant [1] - A live audio webcast of the presentation will be available on Cognizant's website, with a replay accessible for 90 days [1] Group 2 - Cognizant is a leading provider of information technology, consulting, and business process services [2] - The company focuses on helping clients modernize technology, reimagine processes, and transform experiences [2] - Cognizant aims to improve everyday life through its services [2]

Group 1 - Cognizant has been recognized as the Global Data Cloud Services Implementation Partner of the Year by Snowflake, highlighting its excellence in delivering large-scale implementations on the Snowflake AI Data Cloud [1] - The award signifies a milestone in the over five-year strategic partnership between Cognizant and Snowflake, focusing on joint innovations and platform co-development [2] - The partnership's success is driven by the Data Estate Migration to Snowflake offering, which aims to reduce complexity and accelerate business value [3] Group 2 - Cognizant Ignition platform, combined with Agentic AI technology, has enabled significant automation efficiencies for clients, achieving 80% migration process automation and 50% cost savings [4] - The collaboration between Cognizant and Snowflake has been praised by Xerox, emphasizing the tangible business value and the effective transformation model in the industry [5][6] - Xerox's Chief Digital Officer noted the importance of building an agile and secure foundation, facilitated by the expertise and tools provided by Cognizant and Snowflake [6]

Financial Data and Key Metrics Changes - In 2024, the company returned $1.2 billion to shareholders and achieved revenue growth of 7.5% year over year in Q1 2025, or 8.2% in constant currency [7][8] - Adjusted earnings per share increased year over year for the sixth consecutive quarter in Q1 2025 [8] - The company expects to increase shareholder returns to $1.7 billion in 2025 [21] Business Line Data and Key Metrics Changes - The company signed 29 large deals in 2024, up from 17 the previous year, indicating a strong demand for its services [7] - Client Net Promoter scores are near all-time highs, and employee engagement scores are well above global and IT industry benchmarks [10] Market Data and Key Metrics Changes - The company reported that over 72% of its global employees are based in India, which may influence operational strategies [46] Company Strategy and Development Direction - The company is focusing on AI-powered software-led engineering and has invested in platforms like NeuroSuite and FlowSource [12] - A dual transformation strategy is being pursued, emphasizing hyper productivity from AI and innovation from intelligent systems [12] - The company aims to broaden its portfolio and deepen its industry focus while fostering a culture that attracts and develops talent [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the near-term macro environment is uncertain but remains focused on building a long-term advantage [22] - The company is committed to investing in each geography based on growth needs and market conditions [48] Other Important Information - The company has launched a company-wide cost discipline initiative and modernized operations to better serve clients globally [9] - The Synapse program has trained over 400,000 individuals, with a goal of reaching 1 million [16] Q&A Session Summary Question: Will tariffs have any impact on CTSH? What percent of CTSH employees are in India? - The CFO stated that tariffs do not directly impact the services business, but there may be secondary effects on certain industries [45] - Over 72% of the company's employees are based in India [46] Question: Why did Zane Abdallah and Leo McKay receive more than 50 million against votes each in 2024? - The company does not have visibility into why shareholders vote against certain directors but noted that all directors received over 85% support [47] Question: How much investment will be in the US, and will the employee raise be better than the 1% policy from last year? - The CFO mentioned that investment decisions will be based on growth needs and market conditions, and the 2025 compensation raise approach has not yet been finalized [48][49]

Company Overview - Cognizant (CTSH) shares have increased by approximately 7.2% over the past month, outperforming the S&P 500 [1] - The most recent earnings report is crucial for understanding the catalysts affecting the stock [1] Earnings Estimates - Estimates for Cognizant have been revised upward in the past month, indicating positive sentiment among analysts [2][4] - The stock currently holds a Zacks Rank 2 (Buy), suggesting expectations for above-average returns in the coming months [4] VGM Scores - Cognizant has an average Growth Score of C, a Momentum Score of F, and a Value Score of B, resulting in an aggregate VGM Score of B [3] Industry Performance - Cognizant is part of the Zacks Computers - IT Services industry, where Roper Technologies (ROP) has seen a 1.2% gain over the past month [5] - Roper Technologies reported revenues of $1.88 billion for the last quarter, reflecting a year-over-year increase of 12% [5] - Roper Technologies is expected to post earnings of $4.82 per share for the current quarter, indicating a 7.6% increase from the previous year [6]