Core 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].

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 - Growth investors seek stocks with above-average financial growth, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being highly desirable [4] - Cognizant's projected EPS growth for this year is 10.1%, surpassing the industry average of 8.9% [5] Asset Utilization Ratio - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for assessing a growth stock's efficiency [6] - Cognizant has an S/TA ratio of 1.04, indicating it generates $1.04 in sales for every dollar in assets, compared to the industry average of 0.88 [6] Sales Growth - Sales growth is another key indicator, with Cognizant expected to achieve a sales growth of 6.6% this year, outpacing the industry average of 5.3% [7] Earnings Estimate Revisions - Trends in earnings estimate revisions are correlated with stock price movements, with positive trends being favorable [8] - Cognizant's current-year earnings estimates have increased by 1.9% over the past month [9] Overall Assessment - Cognizant holds a Zacks Rank of 2 and a Growth Score of B, indicating it is a potential outperformer and a solid choice for growth investors [11]

Company Overview - Cognizant Technology Solutions Corporation (CTSH) has a market cap of $35.3 billion and is a leading global professional services company providing consulting, technology, and outsourcing services with a focus on digital transformation in AI, cloud, IoT, and software engineering [1] Stock Performance - CTSH shares have underperformed the broader market over the past 52 weeks, declining 2.5% compared to a 17.6% gain in the S&P 500 Index [2] - Year-to-date, CTSH shares have decreased by 5.7%, while the S&P 500 has risen by 16.3% [2] - The company's stock has also lagged behind the Technology Select Sector SPDR Fund's return of 30.8% over the same period [3] Recent Financial Performance - On October 29, Cognizant reported Q3 2025 adjusted EPS of $1.39 and revenue of $5.42 billion, exceeding estimates [4] - The company raised its full-year adjusted profit forecast to a range of $5.22 to $5.26 per share and lifted the lower end of its annual revenue outlook to $21.05 billion [4] Analyst Expectations - For the fiscal year ending December 2025, analysts expect CTSH's adjusted EPS to grow 10.5% year-over-year to $5.25 [5] - Cognizant has a promising earnings surprise history, having beaten consensus estimates in the last four quarters [5] - Among 25 analysts covering the stock, the consensus rating is a "Moderate Buy," with seven "Strong Buys," one "Moderate Buy," and 17 "Holds" [5] Price Target and Analyst Ratings - On October 30, JPMorgan raised its price target on Cognizant to $92 while maintaining an "Overweight" rating [7] - The mean price target of $85.28 indicates an 18.2% premium to CTSH's current price levels, while the highest price target of $103 suggests a potential upside of 42.7% [7]

Core Viewpoint - Cognizant (CTSH) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in a company's earnings picture, with the Zacks Consensus Estimate reflecting EPS estimates from sell-side analysts [1][2]. - The correlation between earnings estimate revisions and stock price movements is strong, particularly due to institutional investors who adjust their valuations based on these estimates [4][6]. Cognizant's Earnings Outlook - For the fiscal year ending December 2025, Cognizant is expected to earn $5.16 per share, which remains unchanged from the previous year, but the Zacks Consensus Estimate has increased by 1.5% over the past three months [8]. - The upgrade to Zacks Rank 2 places Cognizant in the top 20% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7][9]. - The system maintains a balanced distribution of ratings, ensuring that only the top 5% of stocks receive a "Strong Buy" rating, while the next 15% receive a "Buy" rating [9].

Core Insights - Cognizant's international revenue performance is crucial for assessing its financial resilience and growth prospects [1][2][3] Group 1: Financial Performance - Cognizant's total revenue for the quarter ending June 2025 was $5.25 billion, reflecting an 8.1% increase year-over-year [4] - The United Kingdom contributed $482 million, or 9.2% of total revenue, exceeding analyst expectations by 5.4% [5] - Continental Europe generated $520 million, accounting for 9.9% of total revenue, surpassing projections by 7.42% [6] - The Rest of World segment accounted for $331 million, or 6.3% of total revenue, falling short of expectations by 36.2% [7] Group 2: Future Projections - Analysts project total revenue for the upcoming quarter to reach $5.33 billion, a 5.6% increase from the same quarter last year [8] - Expected contributions from the United Kingdom, Continental Europe, and Rest of World are $496.46 million (9.3%), $499.55 million (9.4%), and $381.18 million (7.2%), respectively [8] - For the full year, total revenue is anticipated to be $20.9 billion, marking a 5.9% increase compared to the previous year [9] Group 3: Market Dependency - Cognizant's reliance on global markets for revenue presents both opportunities and challenges, making international revenue trends a key indicator for future performance [10][11] - The current geopolitical landscape and global interconnections are critical factors influencing earnings predictions for companies with overseas operations [11]

Core Viewpoint - Sanmina (SANM) reported quarterly earnings of $1.41 per share, exceeding the Zacks Consensus Estimate of $1.38 per share, and showing an increase from $1.30 per share a year ago, indicating a positive earnings surprise of 2.17% [1][2] Financial Performance - The company achieved revenues of $1.98 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1.75% and up from $1.83 billion year-over-year [2] - Over the last four quarters, Sanmina has exceeded consensus EPS estimates three times and topped consensus revenue estimates three times [2] Stock Performance - Sanmina shares have increased approximately 8.7% since the beginning of the year, contrasting with the S&P 500's decline of -6.1% [3] - The current consensus EPS estimate for the upcoming quarter is $1.60 on revenues of $2.09 billion, and for the current fiscal year, it is $6.01 on revenues of $8.19 billion [7] Industry Outlook - The Electronics - Manufacturing Services industry, to which Sanmina belongs, is currently ranked in the top 39% of over 250 Zacks industries, suggesting a favorable outlook [8]