Cognizant Technology Solutions Corporation (CTSH) Hits Fresh High: Is There Still Room to Run?

Core Insights - Cognizant's shares have increased by 5.8% over the past month, reaching a 52-week high of $81.75, with a year-to-date gain of 6.3% compared to the Zacks Computer and Technology sector's 31.4% and the Zacks Business - Software Services industry's 21.9% [1] Financial Performance - Cognizant has consistently exceeded earnings expectations, reporting an EPS of $1.25 against a consensus estimate of $1.14 in its latest earnings report on October 30, 2024, and beating revenue estimates by 0.82% [2] - For the current fiscal year, Cognizant is projected to achieve earnings of $4.66 per share on revenues of $19.72 billion, reflecting a 2.42% increase in EPS and a 1.88% increase in revenues. For the next fiscal year, earnings are expected to rise to $4.97 per share on $21.02 billion in revenues, indicating year-over-year changes of 6.71% and 6.62%, respectively [3] Valuation Metrics - Cognizant's current valuation metrics show a Price-to-Earnings (P/E) ratio of 17.2X for the current fiscal year, significantly lower than the peer industry average of 32.7X. The trailing cash flow basis shows a ratio of 14X compared to the peer group's average of 30.9X, and the PEG ratio stands at 2.21, indicating it is not among the top value stocks [7] - The company has a Value Score of B, a Growth Score of C, and a Momentum Score of D, resulting in a combined VGM Score of B [6] Zacks Rank - Cognizant holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts, suggesting potential for further gains [8][9]