Yahoo Finance Cognizant Technology Solutions Corporation (NASDAQ:CTSH) Just Released Its First-Quarter Earnings: Here's What Analysts Think
As you might know, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) recently reported its quarterly numbers. Cognizant Technology Solutions reported US$4.8b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.10 beat expectations, being 2.5% 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.
View our latest analysis for Cognizant Technology Solutions
Following last week's earnings report, Cognizant Technology Solutions' 27 analysts are forecasting 2024 revenues to be US$19.4b, approximately in line with the last 12 months. Statutory earnings per share are predicted to rise 8.5% to US$4.56. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$19.4b and earnings per share (EPS) of US$4.53 in 2024. 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.
There were no changes to revenue or earnings estimates or the price target of US$77.46, 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. Currently, the most bullish analyst values Cognizant Technology Solutions at US$94.00 per share, while the most bearish prices it at US$65.00. 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.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Cognizant Technology Solutions' revenue growth is expected to slow, with the forecast 0.6% annualised growth rate until the end of 2024 being well below the historical 4.3% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.5% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Cognizant Technology Solutions.
The Bottom Line
The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous 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. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Cognizant Technology Solutions going out to 2026, and you can see them free on our platform here..
And what about risks? Every company has them, and we've spotted 1 warning sign for Cognizant Technology Solutions you should know about.
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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.
