Core Viewpoint - The near-term prospects of the Zacks Business-Software Services industry are negatively impacted by macroeconomic challenges, high interest rates, and inflation, leading to delayed investments in technology products. However, the long-term outlook remains positive due to ongoing digital transformation and cloud adoption trends driving demand for business software and services [1][2][6]. Industry Overview - The Zacks Business-Software Services industry encompasses companies that provide specialized software products and services, including licensed and cloud-based applications across various sectors such as finance, sales, human resources, and supply chain management [3]. Trends Shaping the Industry - **Transition to Cloud**: The shift from legacy systems to cloud-based infrastructure is increasing demand for multi-cloud-enabled software solutions, with companies integrating AI to enhance application performance [4]. - **Subscription Model Adoption**: Industry participants are increasingly moving towards subscription and term license-based revenue models, which provide greater revenue visibility but may slow top-line growth initially [5]. - **Mergers and Acquisitions**: Frequent M&A activities are being utilized to expand product offerings, although these may impact profitability in the short term [5]. Macroeconomic Factors - Uncertain macroeconomic conditions and geopolitical issues are likely to lead enterprises to delay significant IT investments, negatively affecting the business software services market in the short term [6]. - Elevated operating expenses due to investments in R&D and sales and marketing are expected to strain profit margins [6]. Industry Performance - The Zacks Business-Software Services industry ranks 172 within the broader Zacks Computer and Technology sector, placing it in the bottom 31% of over 250 Zacks industries, indicating bleak near-term prospects [7][8]. - The industry has underperformed compared to the S&P 500 and the broader sector, with a 20.9% increase over the past year, while the S&P 500 and the sector increased by 25% and 38.5%, respectively [9]. Valuation Metrics - The industry's forward 12-month price-to-earnings ratio stands at 27.09X, higher than the S&P 500's 22.01X but slightly lower than the sector's 28.77X [10]. Company Highlights - **MSCI**: Benefits from strong demand for investment decision support tools and ESG solutions, with a consensus estimate for 2024 earnings at $14.67 per share [11][12]. - **Cognizant**: A leading professional services company with a robust product pipeline and strong client partnerships, expecting 2024 earnings of $4.61 per share [13][14]. - **Tyler Technologies**: Focused on the public sector with a strong liquidity position and upward revisions for 2024 earnings to $9.19 per share [15][16]. - **Guidewire Software**: Gains from increased deal volume and cloud migration, with a consensus estimate for 2024 earnings at $1.24 per share [17][18].

Silvent brings significant experience in human resources, talent management, public policy and government affairsTEANECK, N.J., July 11, 2024  /PRNewswire/ -- Cognizant (NASDAQ: CTSH) today announced the appointment of Karima Silvent to its Board of Directors (the "Board") as an independent director, effective immediately. In connection with Ms. Silvent's appointment, Cognizant's Board has expanded to 13 members, 12 of whom are independent.Karima Silvent named to Cognizant's board of directorsMs. Silvent cu ...

NEW YORK, July 11, 2024 (GLOBE NEWSWIRE) -- Cognizant and Yseop, a leading artificial intelligence (AI) software company, have announced a plan to partner to help accelerate and scale the delivery of scientific content in the biopharma industry through generative AI. By utilising Yseop Copilot to transform medical writing in life sciences, the companies are hoping to enhance productivity in the development process and expedite the market introduction of new, life-saving treatments. Cognizant aims to help de ...

Cognizant Technology Solutions (CTSH) benefits from an expanding portfolio with the recent launch of Neuro Edge, a new platform in its Neuro suite.The solution empowers businesses across industries to harness the power of edge AI, enabling real-time decision-making and operational efficiency while reducing dependency on centralized servers and the cloud.Neuro Edge supports a hybrid Cloud + Edge AI approach, ensuring data privacy, security and seamless integration with existing IT environments.With applicati ...

With AI being all the rage, it’s no surprise that investors want to get their hand into the “cookie jar” of AI-adjacent stocks. Big data companies are going to be one of the biggest winners from this surge — they provide the data through which models are trained. The returns provided by these companies have regularly beaten market indices, and have often provided investors with consistent triple-digit growth. However, the sector is extremely competitive and volatile. Certain companies that were touted as “c ...

Platform enables real-time AI-enabled data processing across industries, enhancing data privacy and operational efficiency.TEANECK, N.J., July 1, 2024 /PRNewswire/ -- Cognizant (NASDAQ: CTSH) announced the launch of Cognizant Neuro®️ Edge, a new platform in the Cognizant Neuro®️ suite, designed to empower businesses across industries to leverage artificial intelligence and generative AI at the edge.Edge computing enables enterprises to access computing power via sensors and devices on their networks, reduci ...

Cognizant Technology Solutions (CTSH) recently announced a new agreement with Texas Dow Employees Credit Union (TDECU), the largest credit union in Houston and the fourth largest in Texas, to accelerate its ‘Run the Business’ transformation journey.As part of the collaboration, Cognizant will deploy its Neuro IT Operations platform, an AI-driven automation solution, to transform TDECU’s enterprise infrastructure and technology, boosting operational efficiency and resilience while generating substantial cost ...

Cognizant Technology Solutions (CTSH) recently announced the expansion of its partnership with Cengage Group, a prominent global edtech company catering to students from middle school through graduate studies and skills education.The seven-year agreement enhances Cognizant’s role in delivering advanced technology services, aimed at improving operational efficiency and supporting Cengage Group’s ongoing digital transformation efforts.Building on the successful collaboration in developing Cengage Unlimited, a ...

Cognizant will provide infrastructure, data, and testing services to support the credit union's transformation for the next five years. TEANECK, N.J., June 27, 2024 /PRNewswire/ -- Cognizant (NASDAQ: CTSH) announced today a new agreement with Texas Dow Employees Credit Union (TDECU), the largest credit union in Houston and the fourth largest in Texas, to accelerate its 'Run the Business' transformation journey. Cognizant, a global leader in digital transformation, will be leveraging its Neuro® IT Operation ...

abluecup/iStock via Getty Images Cognizant Technology Solutions Corporation (NASDAQ:CTSH) is an IT services provider whose shares are down by 21% since March 2022, in contrast to my bullish thesis at that time. The shares did go up momentarily but then suffered a long slide mostly because quarterly revenues trended lower as charted below. Data by YCharts Now, this revenue decline was precisely why its CEO was replaced in January of last year, and, since I got it wrong in 2022, this time I will assess th ...