Cognizant on Monday announced the acquisition of Inawisdom, an Artificial Intelligence (AI) and Machine Learning (ML) services expert, for an undisclosed sum.
Cognizant (CTSH) said that Inawisdom will be joined up with Contino, another company, which is part of its digital business group, to provide end-to-end cloud-native AI and machine learning solutions. London-based Contino, which was acquired by Cognizant in 2019, focuses on helping clients fast-track their transition to become digital businesses with enterprise DevOps methodologies, a cloud-native development approach, and innovative data platforms.
The acquisition marks Cognizant’s ninth acquisition in 2020 to enhance its AI, cloud, digital engineering, and IoT offerings. The digital and IT services company has invested more than $1.1 billion in 2020 for acquisitions.
“We are pleased to welcome Inawisdom’s skilled team to Cognizant and further accelerate our innovation on data modernization and intelligent decision-making. Cognizant and Inawisdom’s clients will benefit from our shared, deep relationships with AWS and our combined expertise with AI, machine learning, cloud, and data analytics.” said Malcolm Frank, President of Cognizant.
Cognizant shares have gained 30% year-to-date. Last week, Wells Fargo analyst Timothy Willi resumed coverage of the stock with a Buy rating and a price target of $92. This target implies that investors could be yielding a 14% gain over the coming 12 months.
Willi believes efforts by the new management team to refocus Cognizant and rebuild a culture of accountability are beginning to show signs of progress and momentum that should accelerate from this point. (See CTSH stock analysis on TipRanks)
While not a pure play on digital, Willi says the company has a sizeable presence and solid platform to capitalize on the sizeable opportunity to help companies continue their digital transformation journeys, and believes Cognizant is a “soft turnaround” story that is well underway.
From the rest of the Street, the stock scores a cautiously optimistic analyst consensus of a Moderate Buy based on 8 Buys, 4 Holds, and 2 Sells. The average analyst price target of $80.46 implies that the stock is fully priced at current levels.
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