Cognizant(US:CTSH) ZACKS·2025-12-05 18:46Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but they also come with higher risks and volatility. Identifying strong growth stocks is challenging, especially if a company's growth phase is ending [1]. Group 1: Growth Stock Identification - The Zacks Growth Style Score system helps investors identify promising growth stocks by analyzing real growth prospects beyond traditional metrics. Cognizant (CTSH) is currently highlighted as a recommended stock with a favorable Growth Score and a top Zacks Rank [2]. - Research indicates that stocks with the best growth features consistently outperform the market, particularly those with a Growth Score of A or B and a Zacks Rank of 1 (Strong Buy) or 2 (Buy) [3]. Group 2: Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable as it signals strong future prospects. Cognizant's historical EPS growth rate is 7.7%, but projected EPS growth for this year is 10.6%, surpassing the industry average of 10% [4]. Group 3: Asset Utilization and Sales Growth - Cognizant's asset utilization ratio (sales-to-total-assets ratio) is 1.04, indicating that the company generates $1.04 in sales for every dollar in assets, which is higher than the industry average of 0.93, showcasing better efficiency [5]. - The company's sales are expected to grow by 6.7% this year, compared to the industry average of 5.5%, indicating strong sales growth potential [6]. Group 4: Earnings Estimate Revisions - Positive trends in earnings estimate revisions are important for stock price movements. Cognizant's current-year earnings estimates have been revised upward, with the Zacks Consensus Estimate increasing by 0.1% over the past month [7]. Group 5: Overall Assessment - Cognizant has achieved a Zacks Rank of 2 and a Growth Score of B, based on various favorable metrics, suggesting it is a potential outperformer and a solid choice for growth investors [9].