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Cognizant Technology Solutions Corp Class A (CTSH) Stock

Cognizant Technology Solutions Corp Class A Stock Details, Movements and Public Alerts

Cognizant Technology Solutions (CTSH): The $21 Billion AI Transformation Play Rewriting IT Services

When Ravi Kumar S. took over as Cognizant CEO in early 2023, he inherited a $19 billion IT services giant stuck between offshore outsourcing commoditization and the AI revolution. Two years later, Kumar has transformed Cognizant into an enterprise AI powerhouse, earning a spot on TIME's 100 Most Influential in AI 2025 list. The company pledged $1 billion to accelerate AI adoption, launched the Synapse initiative to train 2 million people in generative AI, and built Agent Foundry—an enterprise platform for deploying AI agents at scale. Cognizant's Q3 2025 revenue hit $5.42 billion (up 7.4%), with operating margins expanding to 16% as the company wins mega-deals exceeding $1 billion. For investors seeking exposure to the AI transformation of Global 2000 enterprises, Cognizant offers established client relationships, improving margins, and a visionary CEO betting the company on intelligent automation.

52-Week Range

$89.37 - $64.70

-5.95% from high · +29.91% from low

Avg Daily Volume

4,608,758

20-day average

100-day avg: 3,890,506

Fundamentals

Valuation Metrics

P/E Ratio (TTM)

19.43

Near market average

Forward P/E

14.90

Earnings expected to grow

PEG Ratio

1.48

Reasonably valued

Price to Book

2.72

EV/EBITDA

9.96

EPS (TTM)

$4.32

Price to Sales

1.97

Beta

0.97

Less volatile than market

How is CTSH valued relative to its earnings and growth?
Cognizant Technology Solutions Corp Class A trades at a P/E ratio of 19.43, which is near the market average of approximately 20, suggesting the market views it as fairly valued relative to its earnings. Looking ahead, the forward P/E of 14.90 is lower than the current P/E, indicating analysts expect earnings to grow over the next year. The PEG ratio of 1.48 indicates reasonable value when growth is considered.
What is CTSH's risk profile compared to the market?
With a beta of 0.97, Cognizant Technology Solutions Corp Class A is less volatile than the overall market. This means when the market moves up or down by 10%, this stock typically moves less than 10% in the same direction. Lower beta stocks are often preferred by conservative investors seeking stability. The price-to-book ratio of 2.72 shows investors value the company above its book value, which often reflects intangible assets or growth prospects.

Performance & Growth

Profit Margin

10.20%

Operating Margin

16.00%

EBITDA

$3.78B

Return on Equity

14.50%

Return on Assets

10.20%

Revenue Growth (YoY)

7.40%

Earnings Growth (YoY)

-52.10%

How profitable and efficient is CTSH's business model?
Cognizant Technology Solutions Corp Class A achieves a profit margin of 10.20%, meaning it retains $10.20 from every $100 in revenue after all expenses. This represents a solid margin typical of well-run businesses, showing the company can effectively balance revenue generation with cost control. The operating margin of 16.00% reveals how efficiently the company runs its core business operations before interest and taxes. With ROE at 14.50% and ROA at 10.20%, the company achieves moderate returns on invested capital.
What are CTSH's recent growth trends?
Cognizant Technology Solutions Corp Class A's revenue grew by 7.40% year-over-year, showing steady progress in growing the business. This positive trajectory indicates the company maintains competitive positioning in its markets. Earnings decreased by 52.10% year-over-year, reflecting the bottom-line impact of business performance. These growth metrics should be evaluated against INFORMATION TECHNOLOGY SERVICES industry averages for proper context.

Dividend Information

Dividend Per Share

$1.24

Dividend Yield

1.48%

Ex-Dividend Date

Nov 18, 2025

Dividend Date

Nov 26, 2025

What dividend income can investors expect from CTSH?
Cognizant Technology Solutions Corp Class A offers a dividend yield of 1.48%, paying $1.24 per share annually. This modest yield below 2% suggests the company prioritizes growth investments over current income. While the dividend provides some return, investors are likely attracted more by capital appreciation potential than income generation. To receive the next dividend, shares must be purchased before the ex-dividend date of Nov 18, 2025.
How reliable is CTSH's dividend for long-term investors?
The dividend sustainability can be assessed through the payout ratio - Cognizant Technology Solutions Corp Class A pays $1.24 per share in dividends against earnings of $4.32 per share, resulting in a payout ratio of 28.70%. This conservative payout below 30% indicates excellent dividend safety with substantial room for future increases. The company retains most earnings for growth while still rewarding shareholders. The next dividend payment is scheduled for Nov 26, 2025.

Company Size & Market

Market Cap

$41.0B

Revenue (TTM)

$20.86B

Revenue/Share (TTM)

$42.44

Shares Outstanding

482.65M

Book Value/Share

$30.84

Asset Type

Common Stock

What is CTSH's market capitalization and position?
Cognizant Technology Solutions Corp Class A has a market capitalization of $41.0B, classifying it as a large-cap stock ($10B-$200B). Large-caps are typically industry leaders with established business models, offering a balance of stability and growth potential. They often provide dividend income and are core holdings in institutional portfolios. With 482.65M shares outstanding, the company's ownership is relatively concentrated. As a participant in the INFORMATION TECHNOLOGY SERVICES industry, it competes with other firms in this sector.
How does CTSH's price compare to its book value?
Cognizant Technology Solutions Corp Class A's book value per share is $30.84, while the current stock price is $84.05, resulting in a price-to-book (P/B) ratio of 2.73. This reasonable premium to book value suggests the market values the company's earnings power and intangible assets appropriately. Most profitable companies trade between 1-3x book value. As a common stock, this represents equity ownership with voting rights.

Analyst Ratings

Analyst Target Price

$85.22

1.39% upside potential

Analyst Recommendations

Strong Buy

3

Buy

8

Hold

15

Sell

0

Strong Sell

0

How reliable are analyst predictions for CTSH?
26 analysts cover CTSH with 42% recommending buy/strong buy ratings. Analyst predictions have mixed reliability - studies show consensus rarely beats market returns consistently. The mixed views reflect uncertainty about the outlook. The consensus target of $85.22 implies 1.4% upside, but targets are often adjusted to follow price moves rather than predict them.
What is the Wall Street consensus on CTSH?
Current analyst recommendations:3 Strong Buy, 8 Buy, 15 Hold, 00The neutral stance suggests uncertainty or fair valuation at current levels.Remember that analyst opinions often lag price movements and can be influenced by investment banking relationships.

Fundamentals last updated: Dec 13, 2025, 08:22 AM

Technical Indicators

RSI (14-day)

45.37

Neutral

50-Day Moving Average

$69.83

20.36% above MA-50

200-Day Moving Average

$76.06

10.50% above MA-200

MACD Line

-0.92

MACD Signal

-1.05

MACD Histogram

0.13

Bullish

What does CTSH's RSI value tell investors?
The RSI (Relative Strength Index) for CTSH is currently 45.37, indicating the stock is in neutral territory (40-60 range). Neither buyers nor sellers have clear control, suggesting consolidation or balanced market forces. Combined with the price being above the 50-day moving average, this shows mixed signals requiring careful analysis.
How should traders interpret CTSH's MACD and moving average crossovers?
MACD analysis shows the MACD line at -0.92 above the signal line at -1.05, with histogram at 0.13. This bullish crossover suggests upward momentum is building. The 50-day MA ($69.83) is below the 200-day MA ($76.06), forming a death cross pattern that often warns of extended weakness. Price is currently above both MAs, confirming strength.

Indicators last updated: Oct 8, 2025, 12:46 AM

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Cognizant Technology Solutions (CTSH) Stock Analysis 2025: Complete Investment Guide

The numbers tell a transformation story. Q3 2025 revenue reached $5.42 billion, up 7.4% year-over-year, while operating margins expanded to 16% from 14.6% in the prior year. More impressive: trailing twelve-month bookings hit a record $27.8 billion, growing 6% annually, with Q2 bookings surging 18% driven by two mega-deals with total contract value exceeding $1 billion each. Ravi Kumar is repositioning Cognizant from a labor arbitrage model to an AI builder, and clients are buying the vision—literally, with billion-dollar contracts.

Business Model & Competitive Moat

Cognizant provides IT consulting, application development, systems integration, and infrastructure management to Fortune 1000 enterprises across healthcare, financial services, manufacturing, and technology sectors. The traditional model leveraged offshore development centers in India and the Philippines to deliver cost-effective software development and maintenance. Clients valued the arbitrage: paying $100/hour for U.S. developers versus $30/hour offshore.

Under Ravi Kumar, the moat is evolving. The Agent Foundry platform enables enterprises to build AI agents that automate complex workflows—think intelligent automation beyond simple chatbots. Cognizant's three-vector AI strategy focuses on AI-led platforms, proprietary IP at the edge, and intelligent automation. The partnership with Salesforce's Agentforce creates AI-augmented workforces for enterprise clients. This shifts the value proposition from labor cost savings to productivity multiplication through AI.

Financial Performance

  • •Revenue Growth: Q3 2025 $5.42B (+7.4% YoY), full-year 2025 guidance ~$21.1B (+6-6.3% constant currency)
  • •Margin Expansion: Operating margin 16.0% in Q3, up from 14.6% year-ago, demonstrating operating leverage
  • •EPS Growth: Adjusted EPS $1.39 in Q3 (+11% YoY), GAAP EPS $1.31 in Q2 (+15% YoY)
  • •Bookings Strength: TTM bookings $27.8B (+6% YoY), Q2 bookings +18% with two $1B+ mega-deals
  • •Valuation: P/E 16.71, Forward P/E 12.12 (attractive for growth profile), dividend yield 0.43%

Growth Catalysts

  • •AI Mega-Trend: Enterprise AI adoption accelerating; Cognizant well-positioned with Agent Foundry and Salesforce partnership
  • •Belcan Acquisition: Strategic acquisition added 16 percentage points to Products & Resources segment growth
  • •Large Deal Momentum: Two $1B+ deals in Q2 2025 demonstrate competitive wins in high-value transformation projects
  • •Margin Expansion: AI-driven productivity (20% code AI-generated) reducing delivery costs while maintaining pricing
  • •Synapse Training Program: 2 million GenAI trainees create skilled workforce and client demand for AI services

Risks & Challenges

  • •AI Cannibalization: If AI generates 50%+ of code (Kumar's prediction), revenue per project could decline faster than volume grows
  • •Competitive Intensity: Accenture, TCS, Infosys, and IBM all pursuing similar AI transformation strategies
  • •Client Budget Cycles: IT spending highly correlated with economic conditions; recession would pressure discretionary transformation budgets
  • •Execution Risk: Transitioning 330,000+ employees from traditional development to AI-augmented work requires cultural transformation
  • •Offshoring Backlash: Political pressure for domestic hiring could compress labor cost arbitrage margins

Competitive Landscape

Cognizant competes with Indian IT giants (Tata Consultancy Services, Infosys, Wipro), global consulting firms (Accenture, Deloitte Digital, IBM Consulting), and specialized cloud integrators (Snowflake partners, AWS/Azure consultants). Accenture leads the premium market with $65 billion in revenue and deeper C-suite relationships. Indian competitors compete on price. Cognizant occupies the middle—more strategic than pure outsourcers, less expensive than top-tier consultants.

Ravi Kumar's AI-first positioning differentiates Cognizant. While competitors talk about AI, Kumar committed $1 billion, trained 53,000 employees through the world's largest GenAI hackathon, and built Agent Foundry as a product. The Salesforce Agentforce partnership gives Cognizant exclusive positioning to deploy AI agents across CRM workflows—a massive addressable market as enterprises adopt agentic AI.

Who Is This Stock Suitable For?

Perfect For

  • ✓Value-growth investors seeking AI exposure at reasonable multiples (Forward P/E 12x)
  • ✓Digital transformation theme investors betting on enterprise AI adoption
  • ✓Contrarian investors willing to bet on CEO-led turnarounds in legacy IT services
  • ✓Portfolio diversifiers wanting tech exposure with lower volatility than SaaS stocks

Less Suitable For

  • ✗High-growth investors seeking explosive revenue acceleration (6-7% growth)
  • ✗Income investors (0.43% dividend yield extremely low)
  • ✗Short-term traders (stock lacks momentum catalysts)
  • ✗Tech purists preferring pure-play AI companies over IT services hybrids

Investment Thesis

Cognizant represents a special situation: an undervalued IT services company with AI optionality and visionary CEO execution. The stock trades at a forward P/E of 12.12x despite accelerating bookings, expanding margins, and transformation to higher-value AI services. Ravi Kumar's TIME 100 AI recognition validates the strategic pivot—clients are signing $1 billion+ transformation deals because they trust Cognizant can deliver AI-driven productivity gains.

The risk-reward appears favorable. Bears worry AI will cannibalize revenue (if code generation reduces project scope, revenue declines). Bulls counter that AI expands addressable markets—enterprises that couldn't afford custom development can now build AI-powered solutions affordably, creating net new demand. With operating margins expanding to 16% and $27.8 billion in backlog, Cognizant has visibility into steady growth. The forward P/E of 12x provides downside protection while AI initiatives offer upside optionality. For patient investors willing to hold 3-5 years, Cognizant offers an asymmetric bet on enterprise AI adoption at value stock prices.

Conclusion

Cognizant is a BUY for value-oriented tech investors with 3-5 year horizons. The forward P/E of 12x offers attractive entry for a business with improving fundamentals and strategic repositioning. Ravi Kumar's AI transformation carries execution risk but offers asymmetric upside. The stock lacks near-term catalysts, making it suitable for patient accumulators rather than momentum traders. Dollar-cost averaging into positions captures valuation support while participating in AI upside optionality.
Bull Case
$95 (20% upside) - AI services accelerate growth to 10%+, margins expand to 18%
Base Case
$85 (8% upside) - Steady 6-7% growth, gradual margin gains
Bear Case
$65 (18% downside) - Economic downturn cuts IT spending, AI cannibalization accelerates

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