Cognizant Technology Solutions Corporation (NASDAQ:CTSH) shareholders are probably feeling a little disappointed, since its shares fell 6.5% to US$71.76 in the week after its latest second-quarter results. Cognizant Technology Solutions reported US$5.2b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.31 beat expectations, being 3.9% higher than what the analysts expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
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Taking into account the latest results, the consensus forecast from Cognizant Technology Solutions’ 25 analysts is for revenues of US$20.9b in 2025. This reflects a satisfactory 2.1% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to increase 2.2% to US$5.09. In the lead-up to this report, the analysts had been modelling revenues of US$20.8b and earnings per share (EPS) of US$5.17 in 2025. The consensus analysts don’t seem to have seen anything in these results that would have changed their view on the business, given there’s been no major change to their estimates.
View our latest analysis for Cognizant Technology Solutions
There were no changes to revenue or earnings estimates or the price target of US$88.26, suggesting that the company has met expectations in its recent result. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Cognizant Technology Solutions, with the most bullish analyst valuing it at US$103 and the most bearish at US$75.00 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 4.2% growth on an annualised basis. That is in line with its 3.7% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 11% per year. So although Cognizant Technology Solutions is expected to maintain its revenue growth rate, it’s forecast to grow slower than the wider industry.
The most important thing to take away is that there’s been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Cognizant Technology Solutions’ revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$88.26, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year’s earnings. We have estimates – from multiple Cognizant Technology Solutions analysts – going out to 2027, and you can see them free on our platform here.
We also provide an overview of the Cognizant Technology Solutions Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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