Core Viewpoint - Cognizant Technology Solutions (CTSH) has experienced a 13.1% share price increase over the past year, underperforming compared to the Zacks Business - Software Services industry's growth of 29.2% and the broader Zacks Computer & Technology sector's return of 37.1% [1] Financial Performance - In Q2 2024, Cognizant reported revenues of $4.85 billion, reflecting a year-over-year decline of 0.7% and a 0.5% decline at constant currency [1] - Financial Services revenues decreased by 1.1% year-over-year to $1.447 billion during the same period [1] - For Q3 2024, Cognizant expects revenues to be between $4.89 billion and $4.96 billion, indicating a potential decline of 0.2% to an increase of 1.3% [4] Partnerships and Contracts - Cognizant's expanding partner base includes major companies like Microsoft, Gentherm, Alphabet's Google Cloud, and Victory Capital Holdings [2] - In Q2 2024, Cognizant secured five large contracts, each valued at $100 million or more, and completed 13 similar deals in the first half of 2024, significantly surpassing 2023 levels [2] - A five-year strategic agreement was signed with Victory Capital Holdings to provide IT infrastructure and support for digital transformation [3] Innovation and Technology - Cognizant launched its first set of healthcare large language model solutions utilizing Google Cloud's generative AI technology, targeting high-cost workflows in various operations [2] - The company is collaborating with Microsoft to leverage generative AI and Copilot for innovation across industries [3] - A transformative partnership with mecwacare aims to enhance healthcare services through an integrated platform powered by Salesforce and Workday [3] Market Outlook - Despite a strong portfolio and expanding partner base, Cognizant anticipates that the challenging macro environment will negatively impact spending in the Financial Services segment [4] - The Zacks Consensus Estimate for Q3 revenues is pegged at $5 billion, indicating year-over-year growth of 2.17% [4] - The consensus mark for earnings is $1.15 per share, reflecting a year-over-year decline of 0.86% [4] Valuation Metrics - Cognizant's shares are considered cheap, with a Value Score of B [5] - The forward 12-month Price/Sales ratio for CTSH is 1.99, significantly lower than the industry's 11.56 [6] - The company currently holds a Zacks Rank 3 (Hold), suggesting a cautious approach for potential investors [6]

Industry Overview - The Zacks Business-Software Services industry is experiencing growth due to increased demand for digital transformation, cloud migration, and automation of business processes [1][3] - The industry is characterized by companies providing application-specific software products and services, including finance, sales & marketing, human resources, and supply chain applications [3] Key Trends - Transition to Cloud: There is a robust demand for multi-cloud-enabled software solutions as companies shift from legacy systems to modern cloud infrastructure, incorporating AI for enhanced functionality [4] - Subscription Model Gains Traction: The industry is moving towards subscription and term license-based revenue models, which provide better revenue visibility but may impact short-term top-line growth [5] - Continuous M&A Activity: Companies are engaging in mergers and acquisitions to enhance their product offerings, although this may affect profitability due to increased investments [5] Financial Outlook - IT Spending Forecast: Worldwide IT spending is projected to increase by 7.5% to $5.26 trillion in 2024, with software spending expected to grow by 13.9% year-over-year [6] - Elevated Operating Expenses: Companies are investing heavily in R&D and sales to capture market share, which may strain margins in the near term [6] Industry Performance - Zacks Industry Rank: The industry holds a Zacks Industry Rank of 27, placing it in the top 11% of over 250 Zacks industries, indicating solid near-term prospects [8] - Underperformance Compared to Benchmarks: The industry has increased by 31.6% over the past year, underperforming the S&P 500 and broader sector, which rose by 39.6% and 33.9%, respectively [9] Valuation Metrics - Current Valuation: The industry's forward 12-month price-to-earnings ratio is 29.2, higher than the S&P 500's 21.57 and the sector's 25.99 [10] Company Highlights - MSCI: Benefits from strong demand for custom index modules and ESG solutions, with shares up 4% YTD and a consensus estimate for 2024 earnings at $14.79 per share [13][14] - Tyler Technologies: A leading provider for the public sector, benefiting from higher recurring revenues and a strong liquidity position, with shares up 39% YTD and a consensus estimate for 2024 earnings at $9.36 per share [15] - Cognizant: A professional services company with a robust product pipeline and strong partnerships, shares up 1.3% YTD with a consensus estimate for 2024 earnings at $4.62 per share [16][17] - Guidewire Software: Provides software solutions for insurers, gaining from cloud migration and strategic acquisitions, with shares up 67.1% YTD and a consensus estimate for fiscal 2025 earnings at $1.97 per share [18]

TEANECK, N.J., Sept. 25, 2024 /PRNewswire/ -- Cognizant (NASDAQ:CTSH) today announced it has been named to Fortune's 2024 Change the World list, ranking number 7 among 52 companies across a variety of industries and categories. This recognition celebrates the innovation and societal impact of Cognizant's Synapse initiative to advance technology job training for 1 million people worldwide by 2026.Cognizant has been named to the 2024 Fortune Change the World list.Now in its 10th year, the Fortune Change the W ...

Cognizant Technology Solutions (CTSH) is benefiting from an expanding partner base, which includes the likes of Gentherm (THRM) , Alphabet’s (GOOGL) cloud business Google Cloud and Victory Capital Holdings (VCTR) .It recently celebrated the success of its three-year partnership with the Aston Martin Aramco Formula One Team at a special event held at its MEPZ campus in Chennai. The event featured the presence of two-time Formula One World Champion Fernando Alonso, who engaged with Cognizant’s leadership team ...

mecwacare and Cognizant embark on multi-year relationship to drive innovation and enhance experiences for mecwacare's workforce, clients and their families. SYDNEY and TEANECK, N.J., Sept. 18, 2024 /PRNewswire/ -- mecwacare, a Victorian aged care and community services provider, has announced a complete transformation. In collaboration with Cognizant (Nasdaq: CTSH), a global leader in technology and professional services, mecwacare aims to drive innovation, expanding its healthcare services and enhancing ex ...

Partnership will see Cognizant implement digital products and data capabilities with the goal of enhancing and expanding fan and player engagementLONDON, Sept. 17, 2024 /PRNewswire/ -- The England and Wales Cricket Board (ECB) and Cognizant (Nasdaq: CTSH) have announced a partnership which is set to offer recreational cricket fans, players and volunteers an improved digital experience as part of the national cricket governing body's ongoing digital transformation.As the Official Digital Technology Transform ...

Agreement aims to enhance quality assurance operational efficiency and improve user experience across 26 public service apps for Danish Municipal IT solutionsCOPENHAGEN, Denmark, Sept. 12, 2024 /PRNewswire/ -- Cognizant (NASDAQ: CTSH) today announced its deal with KOMBIT, a municipally owned IT company responsible for strategically operating critical IT solutions for 98 Danish municipalities. As Denmark increasingly prioritizes modern and efficient IT solutions, the collaboration between Cognizant and KOMBI ...

Core Thesis - Cognizant Technology Solutions Corporation is positioned for potential financial growth due to its focus on industries with increasing demand for digital services and transformation, despite concerns about AI disrupting the enterprise software industry [2] Business Overview - Cognizant operates globally in IT services, divided into four segments: Financial Services, Health Sciences, Products & Resources, and Communications, Media and Technology [3] - The company generates 74% of its revenue from North America and 20% from Europe as of 2023 [6] Financial Performance - In Q2 2024, Cognizant reported $4.85 billion in revenue, with Health Sciences and Financial Services contributing 60% of this total [7] - Health Sciences revenue increased by 3% from the previous quarter and 1.7% year-over-year in constant currency, marking a recovery from previous declines [10] - Financial Services segment revenue decreased by 0.8% year-over-year in constant currency but increased sequentially by 5%, indicating a potential recovery [17] Segment Insights - Health Sciences accounts for 42.1% of Cognizant's revenue from outsourcing services, which are often customized and long-term, enhancing client retention [12] - Financial Services has historically been a major revenue contributor, with 60-70% of revenue coming from consulting and technology projects [16] - The company signed 13 large deals (total contract value over $100 million) in the first half of 2024, indicating strong future revenue potential [14] Strategic Initiatives - Cognizant announced plans to acquire Belcan for approximately $1.3 billion, expected to enhance its Engineering Research & Development capabilities and generate over $100 million in annual revenue synergies within three years [18] - The acquisition is projected to contribute more than $800 million in annualized revenue, particularly benefiting the Products & Resources segment [18] Market Position and Valuation - Cognizant's stock is trading at $77.77 per share with a forward P/E ratio of 17.05, which is below the industry average of 26.8 [21] - The market may be undervaluing Cognizant's growth potential, as evidenced by its strategic investments and recent large deal signings [24] Future Outlook - The company expects to benefit from a rebound in discretionary spending in Financial Services as macroeconomic conditions stabilize and interest rates potentially decrease [29] - Growth in the Health Sciences and Products & Resources segments is anticipated due to ongoing digital transformation initiatives and the Belcan acquisition [29]

TEANECK, N.J., Sept. 4, 2024 /PRNewswire/ -- Cognizant (Nasdaq: CTSH), a leading provider of information technology, consulting, and business process services, today announced a presentation at the following investor conference: Goldman Sachs Communacopia + Technology ConferencePresenter: Jatin Dalal, Chief Financial Officer Date: Wednesday, September 11, 2024  Time: 10:10AM PST / 1:10PM EST  A live audio webcast of the presentation will be available at Cognizant's website: http://investors.cognizant.com A ...

Core Viewpoint - Cognizant Technology Solutions reported mixed financial results for Q2 2024, with earnings beating estimates but revenues declining year-over-year, indicating challenges in certain segments and regions [2][3][4]. Financial Performance - Non-GAAP earnings were $1.17 per share, exceeding the Zacks Consensus Estimate by 4.46% and increasing 6.4% year-over-year [2]. - Revenues totaled $4.85 billion, surpassing consensus by 0.91%, but decreased 0.7% year-over-year and 0.5% at constant currency [2]. - Bookings rose 5% year-over-year to $26.2 billion, with a book-to-bill ratio of approximately 1.4 times [2]. Segment Performance - Financial Services revenues (29.9% of total) fell 1.1% year-over-year to $1.447 billion due to a challenging demand environment [3]. - Health Sciences revenues (30.1% of total) increased 1.5% year-over-year to $1.461 billion, driven by strong demand in data and cloud modernization [3]. - Products and Resources revenues (23.2% of total) declined 4.3% year-over-year to $1.12 billion [3]. - Communications, Media and Technology revenues (16.8% of total) rose 1.2% year-over-year to $816 million, benefiting from new acquisitions [3]. Regional Performance - North America revenues increased 0.9% year-over-year, contributing 74.6% to total revenues [3]. - Europe revenues fell 5.5% year-over-year, contributing 18.9% to total revenues, with the U.K. declining 6.1% [4]. - Revenues from the Rest of the World decreased 4.2% year-over-year, contributing 6.5% to total revenues [4]. Operating Metrics - Selling, general & administrative expenses as a percentage of revenues decreased by 90 basis points year-over-year to 16.1% [5]. - GAAP operating margin improved by 280 basis points year-over-year to 14.6% [5][6]. - Non-GAAP operating margin, adjusted for NextGen charges, expanded 100 basis points year-over-year to 15.2% [6]. Balance Sheet - Cash and short-term investments stood at $2.2 billion as of June 30, 2024, slightly down from $2.24 billion [7]. - Total debt decreased to $623 million from $631 million [7]. - Generated $262 million in cash from operations, up from $95 million in the previous quarter [7]. Guidance - For Q3 2024, revenues are expected between $4.89 billion and $4.96 billion, indicating a potential decline of 0.2% to an increase of 1.3% [8]. - Full-year 2024 revenue guidance is set at $19.3-$19.5 billion, reflecting a decline of 0.5% to growth of 1% [8]. - Adjusted operating margin for 2024 is anticipated to be between 15.3% and 15.5% [8]. Market Position - Cognizant has a Zacks Rank 3 (Hold), indicating an expectation of an in-line return in the coming months [11]. - The stock has a poor Growth Score of F and a momentum score of F, but a value score of B, placing it in the top 40% for value investment strategy [10].