Want to see CTSH full AI Analyst Report?
Top Page
Cognizant
(NASDAQ:CTSH)
Select Model
Select Model
Rating:76Outperform
Price Target:
$70.00
â–²(12.74% Upside)
Action:Reiterated
Date:07/29/26
The score is driven primarily by strong financial quality (conservative leverage, durable profitability, and robust free cash flow) and supportive valuation (low P/E with a solid dividend). Earnings-call updates reinforce improving growth and steady margin expansion guidance, while the main offset is weaker longer-term technical posture (still below the 100- and 200-day averages) and noted near-term cost/working-capital headwinds.
Positive Factors
Strong cash generation and low leverage
Robust free cash flow conversion and conservative leverage give Cognizant financial flexibility to fund acquisitions, technology investment, dividends, and buybacks. This combination also improves resilience through demand cycles because the company can support strategic priorities without relying heavily on external financing.
Negative Factors
Historical margin compression
Although recent adjusted margins are improving, the decline from earlier years suggests that pricing, cost, or service-mix pressures have not been fully eliminated. Sustained compression would limit operating leverage and reduce the amount of revenue growth that ultimately converts into earnings and cash flow.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and low leverage
Robust free cash flow conversion and conservative leverage give Cognizant financial flexibility to fund acquisitions, technology investment, dividends, and buybacks. This combination also improves resilience through demand cycles because the company can support strategic priorities without relying heavily on external financing.
Read all positive factors
Cognizant Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyCognizant (CTSH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$26.36B
Dividend Yield2.22%
Average Volume (3M)6.31M
Price to Earnings (P/E)12.6
Beta (1Y)0.96
Revenue Growth5.64%
EPS Growth-5.39%
CountryUS
Employees356,700
SectorTechnology
Sector Strength88
IndustryInformation Technology Services
Share Statistics
EPS (TTM)4.66
Shares Outstanding450,444,200
10 Day Avg. Volume7,043,999
30 Day Avg. Volume6,312,682
Financial Highlights & Ratios
PEG Ratio20.57
Price to Book (P/B)2.66
Price to Sales (P/S)1.89
P/FCF Ratio15.38
Enterprise Value/Market Cap0.72
Enterprise Value/Revenue0.88
Enterprise Value/Gross Profit2.76
Enterprise Value/Ebitda4.82
Forecast
1Y Price Target
$65.80Price Target Upside5.98% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering19
EPS Forecast (FY)5.76
Revenue Forecast (FY)$22.19B
Cognizant Business Overview & Revenue Model
Company Description
Cognizant Technology Solutions Corporation functions as a global professional services firm, delivering a comprehensive suite of consulting, technology, and outsourcing solutions across North America, Europe, and other international markets. Its o...
How the Company Makes Money
Cognizant primarily makes money by delivering technology and operations services to business customers under commercial contracts, generating revenue largely from fees for professional services and managed services. Key revenue streams typically i...
Cognizant Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and strategic picture: revenue growth, margin expansion, strong bookings and large‑deal momentum (particularly in financial services), accelerated AI adoption and platform initiatives, meaningful share repurchases, and healthy free cash flow. Notable near‑term headwinds include Project LEAP costs, India labor reforms run‑rate impacts, higher interest expense from revolver use for acquisitions and buybacks, higher DSO, some industry pockets of muted demand, and observable AI execution/ROI challenges across a portion of the Global 2000. On balance, the positive growth, margin recovery, and AI‑led strategy and execution appear to outweigh the lowlights.Positive Updates
Revenue Growth
Total revenue grew 4.1% year-over-year in constant currency to $5.5 billion, with sequential organic growth at the high end of expectations driven largely by organic business.
Negative Updates
Cautious Demand and Discretionary Spend Pressure
Management noted persistently cautious demand and elevated macro uncertainty; discretionary spending remains pressured across several industries, leading to a revised full‑year revenue guidance range of 4.0% to 5.5% in constant currency (includes ~150 bps inorganic).
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue Growth
Total revenue grew 4.1% year-over-year in constant currency to $5.5 billion, with sequential organic growth at the high end of expectations driven largely by organic business.
Read all positive updates
Company Guidance
Management guided Q3 revenue growth of 3.8%–5.3% year‑over‑year in constant currency (including ~200 bps from recent acquisitions) and revised full‑year revenue to 4.0%–5.5% CC (including ~150 bps of inorganic growth), while keeping adjusted operating margin guidance unchanged at 16.0%–16.2% (about a 20 bps Y/Y expansion). They expect free cash‑flow conversion of 90%–100% of net income, a full‑year tax rate toward the low end of 25%–26% (with Q3 above the full‑year high end), and a weighted‑average diluted share count of ~460 million; EPS guidance was raised to $5.70–$5.82 (up ~8%–10% Y/Y). Management reiterated no change to Project LEAP cost/savings assumptions (program to run through year), noted modestly higher interest expense from a ~$1.0B revolver draw, and said the guidance assumes stable discretionary spend at the midpoint with the high end reflecting improved short‑cycle revenue in Q4 and an active M&A pipeline.Cognizant Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
86
Very Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.64B | 21.11B | 19.74B | 19.35B | 19.43B | 18.51B |
| Gross Profit | 6.93B | 7.12B | 6.78B | 6.69B | 6.98B | 6.90B |
| EBITDA | 3.96B | 4.17B | 3.53B | 3.38B | 3.60B | 3.41B |
| Net Income | 2.22B | 2.23B | 2.24B | 2.13B | 2.29B | 2.14B |
Balance Sheet | ||||||
| Total Assets | 20.82B | 20.69B | 19.97B | 18.48B | 17.85B | 17.85B |
| Cash, Cash Equivalents and Short-Term Investments | 1.05B | 1.91B | 2.24B | 2.63B | 2.50B | 2.72B |
| Total Debt | 2.09B | 1.57B | 1.50B | 1.31B | 1.53B | 1.64B |
| Total Liabilities | 6.36B | 5.68B | 5.56B | 5.26B | 5.54B | 5.86B |
| Stockholders Equity | 14.46B | 15.02B | 14.41B | 13.23B | 12.31B | 11.99B |
Cash Flow | ||||||
| Free Cash Flow | 2.60B | 2.60B | 1.83B | 2.01B | 2.24B | 2.22B |
| Operating Cash Flow | 2.92B | 2.88B | 2.12B | 2.33B | 2.57B | 2.50B |
| Investing Cash Flow | -1.65B | -230.00M | -1.65B | -331.00M | -106.00M | -2.16B |
| Financing Cash Flow | -2.02B | -2.27B | -915.00M | -1.61B | -1.94B | -1.20B |
Cognizant Technical Analysis
Neutral
62.09
Price Trends
58.77
Negative
52.83
Positive
60.34
Negative
Market Momentum
-0.28
Positive
48.17
Neutral
39.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTSH, the sentiment is Neutral. The current price of 62.09 is above the 20-day moving average (MA) of 59.59, above the 50-day MA of 58.77, and above the 200-day MA of 60.34, indicating a bearish trend. The MACD of -0.28 indicates Positive momentum. The RSI at 48.17 is Neutral, neither overbought nor oversold. The STOCH value of 39.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CTSH.
Cognizant Risk Analysis
Cognizant disclosed 1 risk factors in its most recent earnings report. Cognizant reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cognizant Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $121.72B | 14.56 | 26.90% | 3.28% | 6.47% | 11.19% | |
76 Outperform | $26.36B | 12.56 | 14.94% | 2.22% | 5.64% | -5.39% | |
75 Outperform | $43.66B | 13.96 | 32.90% | 4.74% | -0.64% | 5.69% | |
70 Outperform | $16.73B | 4.97 | 22.57% | 5.30% | 18.26% | 2280.55% | |
67 Neutral | $23.59B | 8.50 | 10.77% | 0.49% | -1.17% | -13.24% | |
65 Neutral | $16.41B | 12.62 | 15.58% | 5.04% | -0.12% | -7.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
CTSH
Cognizant
58.51
-7.79
-11.75%
ACN
Accenture
198.90
-41.29
-17.19%
FIS
Fidelity National Info
32.44
-32.24
-49.84%
FISV
Fiserv
44.36
-80.69
-64.53%
INFY
Infosys
11.04
-5.14
-31.78%
WIT
Wipro
1.72
-0.85
-33.18%
Cognizant Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
Cognizant Posts Solid Q2 Results, Raises 2026 Outlook
Positive
Jul 29, 2026
Cognizant reported its second-quarter 2026 results on July 29, 2026, posting revenue of $5.5 billion, up 4.5% year over year, with constant-currency growth of 4.1% and 12% revenue growth in Financial Services. GAAP operating margin rose to 15.9%, ...
Legal ProceedingsRegulatory Filings and Compliance
Cognizant Announces Preliminary Approval of Derivative Settlement
Positive
Jul 10, 2026
On June 30, 2026, the U.S. District Court for the District of New Jersey preliminarily approved a proposed settlement of a stockholder derivative action brought on behalf of Cognizant Technology Solutions Corporation, which alleged breaches of fid...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.