Why Is Cognizant (CTSH) Up 1.1% Since Last Earnings Report?

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].