Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][3] Valuation Metrics - The P/S ratio compares a company's market capitalization to its revenues, providing a clearer picture of value when earnings are minimal or volatile [2][5] - A P/S ratio below 1 indicates a good bargain, as investors pay less than a dollar for each dollar of revenue generated [6] - The P/S ratio is often preferred over the price-to-earnings (P/E) ratio due to the difficulty of manipulating sales figures compared to earnings [7] Investment Opportunities - Low P/S stocks can offer compelling opportunities, often trading below their intrinsic value, making them attractive for investors seeking upside potential [3][10] - Companies such as Hamilton Insurance Group, Macy's Inc., Cognizant Technology Solutions, PCB Bancorp, and PRA Group have low P/S ratios and potential for higher returns [4][10] Company Profiles - **Hamilton Insurance Group**: Operates in specialty insurance and reinsurance, benefiting from strong execution and a clear growth roadmap, with gross premiums written rising significantly [12][13] - **Macy's Inc.**: Undergoing a transformation with its Bold New Chapter program, focusing on digital initiatives and omnichannel retailing, currently holds a Value Score of A and Zacks Rank 2 [14][15] - **Cognizant Technology Solutions**: A leading professional services company with strong growth in Health Sciences and Financial Services, bolstered by acquisitions and AI initiatives [16][17] - **PCB Bancorp**: Offers a range of banking products and services, strategically positioned for sustained growth, currently holds a Value Score of A and Zacks Rank 2 [18][19] - **PRA Group**: Focuses on the purchase and management of non-performing loans, benefiting from strategic acquisitions and a positive purchasing environment, currently holds a Value Score of A and Zacks Rank 2 [20][21]

Core Insights - Cognizant reported strong Q3 earnings with non-GAAP earnings of $1.39 per share, beating estimates by 7.75% and increasing 11.2% year over year [2] - Revenues reached $5.42 billion, surpassing consensus by 1.63%, with a year-over-year growth of 7.4% and 6.5% at constant currency [3] - The company expects Q4 revenues between $5.27 billion and $5.33 billion, indicating growth of 3.8%-4.8% [11] Financial Performance - Non-GAAP earnings per share for Q3 were $1.39, reflecting an 11.2% increase year over year [2] - Total revenues of $5.42 billion showed a 7.4% year-over-year increase, with strong performance in North America [3] - Financial services revenues increased 6.2% year over year to $1.578 billion, while health sciences revenues rose 5.9% to $1.604 billion [5] Segment Performance - Products and Resources revenues grew 12.6% year over year to $1.383 billion, while Communications, Media and Technology revenues increased 4.2% to $850 million [6] - North America contributed 74.4% of total revenues, with a year-over-year increase of 7.8% [6] - Europe revenues increased 7.8% year over year, with Continental Europe showing an 11.1% increase [7] Operational Metrics - Bookings increased 5% year over year to $27.5 billion, with a book-to-bill ratio of approximately 1.3 times [4] - The company reported a GAAP operating margin of 16%, expanding 140 basis points year over year [9] - Selling, general & administrative expenses as a percentage of revenues decreased by 110 basis points to 15.4% [8] Balance Sheet and Cash Flow - Cash and short-term investments increased to $2.35 billion from $1.80 billion in the previous quarter [10] - Total debt decreased to $584 million from $592 million [10] - Free cash flow for the quarter was $1.16 billion, significantly up from $331 million in the prior quarter [10] Future Guidance - For 2025, Cognizant expects revenues between $21.05 billion and $21.10 billion, indicating a growth of 6.6%-6.9% [11] - Adjusted earnings per share for 2025 are projected to be between $5.22 and $5.26 [12] - The company anticipates an adjusted operating margin of approximately 15.7% for 2025, an increase of 40 basis points [11] Market Position - Cognizant has a Zacks Rank 2 (Buy), indicating positive investor sentiment and expectations for above-average returns [15] - The stock has a Growth Score of B and a Value Score of B, reflecting a balanced investment profile [14]

Core Insights - Infosys Ltd is the only major IT services company that has increased its US lobbying expenditure over the past five years, while competitors like Tata Consultancy Services (TCS), Cognizant, and Wipro have reduced their spending [1][19] - The US government, which constitutes a significant portion of revenue for these companies, has tightened labor mobility and restricted access to foreign workers, prompting a shift in lobbying strategies [2][19] Lobbying Expenditure - Infosys spent $270,000 on lobbying in the first nine months of the year, an increase from $240,000 in 2020 [2] - In contrast, TCS and Cognizant reported declines in lobbying expenditures, spending $670,000 and $1.7 million respectively in the first nine months of 2025, down from $750,000 and $3.15 million in 2020 [3] - Wipro's lobbying costs decreased from $210,000 in 2020 to $90,000 in 2022, and it has not engaged lobbying services since then [3] Industry Trends - The overall lobbying spending by major Indian IT firms, including Nasscom, has been declining since 2020, with Nasscom spending less than one-tenth of its 2020 expenditure of $700,000 in the first nine months of 2025 [4][5] - Collectively, the largest IT services companies and Nasscom spent $2.7 million on lobbying, which is less than 1% of their revenue and significantly lower than the $5.05 million spent in 2020 [6] Strategic Shifts - The decline in lobbying costs is attributed to an increase in local hiring and a shift towards offshore delivery and AI utilization, reducing dependency on large onshore workforces [11] - The political climate has changed, making lobbying less effective, leading firms to focus on structural changes rather than political influence [12] Key Issues in Lobbying - H-1B visa regulations remain a central lobbying focus for the top three IT service providers, with TCS and Cognizant highlighting immigration-related issues in their lobbying reports [13][14] - Recent changes in H-1B application fees and scrutiny over hiring practices have intensified the need for lobbying among these firms [15][16][17] Conclusion - Infosys stands out for increasing its lobbying efforts amidst a general decline in political spending by its peers, reflecting a strategic pivot in response to stricter US labor mobility rules and a focus on local hiring and AI-driven models [19]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies and confidence [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks into four main types: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score emphasizes identifying undervalued stocks using financial ratios [3] - Growth Score focuses on a company's future earnings and financial health [4] - Momentum Score assesses stocks based on price trends and earnings outlook [5] - VGM Score combines the three styles to identify stocks with the best overall potential [6] Zacks Rank and Performance - The Zacks Rank is a proprietary model that uses earnings estimate revisions to assist in stock selection [7] - Stocks rated 1 (Strong Buy) have historically outperformed the S&P 500, with an average annual return of +23.93% since 1988 [8] - There are over 800 stocks rated 1 or 2, making it essential for investors to utilize Style Scores to narrow down choices [9] Stock Example: Cognizant Technology Solutions Corporation (CTSH) - Cognizant is currently rated 3 (Hold) with a VGM Score of A, indicating potential for growth [11] - The company is projected to achieve a year-over-year earnings growth of 10.5% for the current fiscal year [11] - Recent upward revisions in earnings estimates have increased the Zacks Consensus Estimate to $5.25 per share, with an average earnings surprise of +5.8% [12]

Core Insights - Cognizant has been selected by the Coalition for Epidemic Preparedness Innovations (CEPI) to implement a comprehensive digital transformation program, including a new core HR and Expense Management System and support for CEPI's Salesforce platform [1][2][4] Group 1: Project Scope and Objectives - The multi-year engagement aims to enhance CEPI's digital transformation strategy by strengthening core platforms and introducing AI-enabled insights, automation, and scalable solutions to improve efficiency and reduce operational costs [2][4] - Cognizant will ensure the Salesforce platform remains robust and scalable, aligning with CEPI's organizational goals while also establishing a roadmap for enterprise architecture [4] Group 2: Partnership and Cultural Alignment - CEPI values collaboration, impact, and resilience, which align closely with Cognizant's values, making Cognizant a trusted partner for this initiative [3][5] - The selection of Cognizant followed a competitive procurement process, highlighting its technical competence and cultural alignment with CEPI [3][5] Group 3: CEPI's Mission and Goals - CEPI is focused on accelerating the development of vaccines and biologic countermeasures against epidemic and pandemic threats, with a mission to make them accessible to all [6] - CEPI has supported the development of over 70 vaccine candidates against high-risk pathogens and aims to reduce vaccine development time to just 100 days for new threats [6]

Core Viewpoint - Growth investors are attracted to stocks with above-average financial growth, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score helps identify promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Cognizant (CTSH) is currently recommended due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for attracting investor attention, with double-digit growth being particularly desirable [4] - Cognizant's projected EPS growth for this year is 10.6%, surpassing the industry average of 10.2% [5] Group 3: Asset Utilization - The asset utilization ratio indicates how efficiently a company generates sales from its assets [6] - Cognizant's S/TA ratio is 1.04, outperforming the industry average of 0.93, indicating higher efficiency [6] Group 4: Sales Growth - Sales growth is another important metric, with Cognizant expected to achieve a 6.7% sales growth this year, compared to the industry average of 5.6% [7] Group 5: Earnings Estimate Revisions - Trends in earnings estimate revisions correlate strongly with stock price movements [8] - Cognizant has seen a 1.8% upward revision in current-year earnings estimates over the past month [9] Group 6: Overall Positioning - Cognizant has a Growth Score of B and a Zacks Rank 2, positioning it well for potential outperformance in the growth investing space [11]

Core Viewpoint - The comparison between Cognizant (CTSH) and CoStar Group (CSGP) indicates that CTSH is more attractive to value investors due to its stronger earnings outlook and favorable valuation metrics [1][3][6] Valuation Metrics - CTSH has a forward P/E ratio of 13.65, significantly lower than CSGP's forward P/E of 79.77, suggesting that CTSH is undervalued relative to CSGP [5] - The PEG ratio for CTSH is 1.47, while CSGP's PEG ratio is 1.91, indicating that CTSH offers better value when considering expected earnings growth [5] - CTSH's P/B ratio stands at 2.32 compared to CSGP's P/B of 3.28, further supporting the notion that CTSH is a more attractive investment [6] Zacks Rank and Style Scores - CTSH holds a Zacks Rank of 2 (Buy), reflecting positive revisions to its earnings estimates, while CSGP has a Zacks Rank of 4 (Sell) [3] - The Style Score Value grade for CTSH is A, indicating strong fundamental metrics, whereas CSGP has a Value grade of F, highlighting its weaker valuation [6]

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][10] - Low P/S stocks often trade below their intrinsic value, making them attractive for investors seeking growth at a discount [3][6] - The P/S ratio is preferred over the price-to-earnings (P/E) ratio due to its reliability, as sales are harder to manipulate than earnings [7][10] Company Highlights - **Hamilton Insurance Group, Ltd. (HG)**: Operates in specialty insurance and reinsurance, benefiting from strong execution and a clear growth roadmap. The company has a Zacks Rank 1 and a Value Score of A, with gross premiums written rising significantly [12][13] - **Macy's Inc. (M)**: Undergoing a transformation through its "Bold New Chapter" program, focusing on digital initiatives and omnichannel retailing. The company has a Zacks Rank 2 and a Value Score of A [14][15] - **Cognizant Technology Solutions (CTSH)**: A leading professional services company with strong growth in Health Sciences and Financial Services. The acquisition of Belcan is enhancing its portfolio, and it holds a Zacks Rank 2 with a Value Score of A [16][17] - **PCB Bancorp (PCB)**: Offers a range of banking products and services, with a focus on small and medium-sized businesses. The company has a Zacks Rank 2 and a Value Score of A, positioning it for sustained growth [18][19] - **PRA Group (PRAA)**: Engaged in the purchase and management of non-performing loans, benefiting from strategic acquisitions and a positive purchasing environment. The company has a Zacks Rank 2 and a Value Score of A [20][21]

Core Insights - Cognizant Technology Solutions (CTSH) is enhancing its AI capabilities through the acquisition of 3Cloud, a leading Microsoft Azure service provider, which will add over 1,000 Azure experts and 1,500 Microsoft certifications to its workforce [1][11] - The acquisition will expand Cognizant's Azure portfolio and client base across various sectors, including banking, healthcare, and technology [2][11] - Cognizant's recent acquisitions have contributed significantly to its revenue growth, with an expected inorganic growth impact of 250 basis points for 2025 [3][11] Financial Performance - Cognizant's revenue growth for the trailing nine months of 2025 was 7.6% year over year, reaching $1.12 billion, with recent acquisitions adding approximately 350 basis points to this growth [3] - The company anticipates fourth-quarter 2025 revenues to be between $5.27 billion and $5.33 billion, reflecting a growth of 3.8-4.8% on a reported basis [8] - The Zacks Consensus Estimate for fourth-quarter 2025 revenues is $5.31 billion, indicating a year-over-year growth of 4.43% [9] Strategic Partnerships and AI Integration - Cognizant's expanding partner ecosystem, including companies like Anthropic and Rubrik, is a key driver for its growth, enabling the integration of advanced AI tools into client operations [5] - The company has embedded AI across more than 150 use cases, enhancing productivity and decision-making processes [7] Market Position and Stock Performance - Cognizant's shares have appreciated by 8.9% over the past month, outperforming the Zacks Computers – IT Services industry, which declined by 3% [4] - The company is currently ranked 2 (Buy) by Zacks, indicating a positive outlook in the market [12]

Core Insights - Cognizant has signed a definitive agreement to acquire 3Cloud, a leading independent Microsoft Azure service provider, enhancing its capabilities in data, AI, application innovation, and enterprise cloud platforms [1][3][4] - The acquisition is expected to significantly expand Cognizant's Azure product portfolio and deepen its expertise in complex engineering projects, driving AI-led business transformation [3][5] - 3Cloud has achieved a 20% organic compound annual growth rate since 2020, with expectations to maintain similar growth through 2025, driven by strong demand for Microsoft Azure-based business transformation [3][6] Company Overview - 3Cloud primarily serves enterprise clients across sectors such as banking, healthcare, technology, and consumer goods [3] - The integration will add over 1,000 Azure experts and more than 1,500 Microsoft certifications to Cognizant's existing team of nearly 20,000 Azure-certified employees [3][5] - 3Cloud has been recognized multiple times as a top Microsoft Azure partner, winning various awards for its innovative Azure solutions [6] Strategic Implications - The acquisition is seen as a critical step for Cognizant in advancing its enterprise AI strategy, enabling organizations to rapidly build, deploy, and scale AI solutions [3][4] - Cognizant aims to establish itself as a leading partner within the Azure ecosystem, leveraging 3Cloud's expertise to enhance client value in their AI journeys [4][5] - The deal is expected to close in the first quarter of 2026, pending regulatory approvals and other closing conditions [6]