Can Cognizant's Collaboration With Siemens Push the Stock Higher?

Core Insights - Cognizant Technology Solutions (CTSH) has announced a collaboration with Siemens Digital Industries Software to enhance its software-defined vehicle (SDV) solution accelerator by integrating Siemens PAVE360 platform [1] - The advanced solution aims to streamline the SDV development process, addressing demands for faster innovation and efficient management of complex software systems [2][3] Collaboration and Partnerships - The collaboration with Siemens is designed to help automotive clients manage increasing customization and complexity in modern vehicle software, ultimately reducing development time [3] - Cognizant's expanding partner base includes Siemens, ZScaler, IBM, Palo Alto Networks, NVIDIA, and Amazon, which is expected to drive its prospects in 2025 [5] - In Q3 2024, Cognizant signed six deals exceeding $100 million each, totaling 19 large deals year-to-date, surpassing 2023's 17 deals [5] Financial Performance and Estimates - Cognizant's shares have increased by 13.6% over the past six months, outperforming the broader Zacks Computer & Technology sector's return of 2.8% [4] - The Zacks Consensus Estimate for 2025 revenues is $21.02 billion, indicating a year-over-year growth of 6.62%, with earnings estimated at $4.97 per share, reflecting a 6.58% increase [8] Valuation and Market Position - Cognizant's shares are considered undervalued, with a Value Score of B and a forward 12-month Price/Sales ratio of 1.79, significantly lower than the industry's 9.74 [9] - The company currently holds a Zacks Rank 3 (Hold), suggesting that investors should wait for a more favorable entry point [10]