Cognizant Q3 Earnings Oct. 29: Wedbush Holds $70 Target
Consensus on CTSH is $1.46 EPS and $5.65B revenue entering the Oct. 29 Q3 report. Alpha Score is 42 (Mixed), and Wedbush holds a $70 price target.
Cognizant Technology Solutions Corp. reports Q3 results on Oct. 29, with analysts looking for adjusted earnings of $1.46 a share and revenue near $5.65 billion. Demand across its business segments has been steady, Financial Services in particular, ahead of the print.
Wedbush reaffirmed its Outperform rating and $70 price target on the stock, citing AI-driven modernization initiatives and the Project LEAP margin program as growth drivers. GuruFocus frames AI modernization as a critical investment area for Cognizant's clients, one that supports revenue growth and client retention. The LEAP timeline and the AI pipeline underpin the Wedbush rating, according to GuruFocus.
Cognizant is a global professional services firm that does IT consulting, application development, digital engineering, and business process outsourcing. It sits in the Software industry within the Technology sector. North America is its main market, with additional operations in Europe and the Middle East. The company runs a global delivery model backed by a substantial workforce in India and other lower-cost locations. Its market capitalization is $26.51 billion.
GuruFocus's GF Value model puts fair value at $86.52, about 32% above the $58.86 share price at the time of the GuruFocus alert. The forward P/E of 9.3 times sits well below the five-year median of 16.33 times, and the trailing multiple is 12.63 times. GuruFocus puts the Altman Z-score at 5.41, which it treats as low bankruptcy risk. The GF Score, a composite of profitability, growth, financial strength, valuation, and momentum, is 92 out of 100. GuruFocus's alert describes the stock as trading well below its intrinsic value on historical multiples and growth trends.
Within that score, the strongest inputs are profitability and financial strength, with operating margins expanding. Growth is supported by consistent revenue and earnings expansion, GuruFocus said. The score's weakest input is momentum, which GuruFocus says remains positive. GuruFocus says the score reflects a well-managed company with solid fundamentals.
The dividend yield is 2.29%, with a payout ratio of 27% and dividend growth of 4.7% over the past three years. Just over a quarter of earnings goes to the dividend. GuruFocus describes the payout as sustainable given that buffer. The alert reads the dividend record as management balancing shareholder returns with reinvestment needs.
GuruFocus reads the net accumulation of stakes as support for the company's long-term prospects. The firm tracks 17 premium gurus holding CTSH; 11 added to their positions and 6 trimmed in recent quarters. Insider selling runs the other way: insiders sold $6.3 million of stock and bought $0.2 million over the past 12 months. GuruFocus treats the insider selling as routine for a large cap, noting it can reflect personal liquidity needs rather than a change in the business outlook.
CTSH carries an Alpha Score of 42 out of 100, labeled Mixed, on its stock page.
Project LEAP's margin benefits are scheduled for fiscal 2027, according to GuruFocus.
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