Cognizant Sees Bullish Outlook with New Buy Recommendation and $100 Price Target

Cognizant has received a new Buy rating and $100 price target from Evercore ISI analyst Amit Daryanani. The company's shares closed at $73.53. The analyst consensus on Cognizant is a Moderate Buy with an average price target of $89.14, a 21.23% upside from current levels. Based on its latest earnings release, Cognizant reported a quarterly revenue of $5.12 billion and a net profit of $663 million.

Cognizant Technology Solutions (CTSH) has received a new Buy rating and a $100 price target from Evercore ISI analyst Amit Daryanani. The company's shares closed at $73.53 on July 2, 2025. This new rating comes as Cognizant reported strong second-quarter earnings, with a quarterly revenue of $5.12 billion and a net profit of $663 million.

In its latest earnings release, Cognizant reported non-GAAP earnings of $1.31 per share, beating the Zacks Consensus Estimate by 3.97% and increasing 12% year over year [1]. Revenues of $5.25 billion also exceeded the consensus mark by 1.01%, driven by the Belcan acquisition and robust organic growth, particularly in Health Sciences and Financial Services. The company's top line increased 8.1% year over year and 7.2% at constant currency (cc).

The Belcan acquisition significantly contributed to revenue growth, with approximately 400 basis points of inorganic contribution to the overall results. On a trailing 12-month basis, bookings increased 6% year over year to $27.8 billion, which represented a book-to-bill of approximately 1.4 times. Second-quarter bookings included six large deals, including two mega deals valued at around $1 billion each, doubling the total contract value (TCV) of large deals year over year.

Cognizant had over 2,500 early Generative AI client engagements in the second quarter of 2025. The company's shares have underperformed the Zacks Computer & Technology sector in the year-to-date period, losing 4.4% while the broader sector has surged 11.1%. The raised guidance is expected to help CTSH stock recover.

CTSH's operating margin expanded 100 bps year over year to 15.6% on a GAAP basis and 40 bps year over year to 15.6% on a non-GAAP basis (adjusted for NextGen charges). The company's cash and short-term investments stood at $1.80 billion as of June 30, 2025, compared to $1.99 billion as of March 31, 2025. Total debt was $592 million as of June 30, 2025, down from $600 billion reported as of March 31, 2025.

For the third quarter of 2025, Cognizant expects revenues between $5.27 billion and $5.35 billion, indicating growth of 4.6%-6.1% and an increase of 3.5%-5% on a cc basis. For 2025, revenues are expected to be in the range of $20.7-$21.1 billion, an increase of 4.7-6.7% on a reported basis and growth of 4%-6% on a cc basis. Adjusted operating margin for 2025 is expected to be approximately 15.5% to 15.7% (an increase of 20 to 40 basis points). Adjusted earnings per share for 2025 are expected to be between $5.08 and $5.22.

The analyst consensus on Cognizant is a Moderate Buy with an average price target of $89.14, a 21.23% upside from current levels. CTSH currently carries a Zacks Rank #3 (Hold). CommScope (COMM), Arista Networks (ANET), and Bumble (BMBL) are some better-ranked stocks that investors can consider in the broader Computer and Technology sector.

References:
[1] https://www.nasdaq.com/articles/cognizant-q2-earnings-beat-estimates-will-raised-view-aid-shares