Update shared on 13 Nov 2025
Fair value Increased 0.57%The analyst price target for Cognizant Technology Solutions has been adjusted downward by $0.48 to $84.86. Analysts point to solid quarterly results and improved profit margins, balanced against sluggish bookings growth and ongoing sector challenges.
Analyst Commentary
Recent analyst coverage of Cognizant Technology Solutions reflects a balance of positive momentum and ongoing sector hurdles. The perspectives offer insight into the drivers behind recent price target adjustments and provide context for investors evaluating the company's outlook.
Bullish Takeaways
- Analysts highlight Cognizant’s solid quarterly results, with performance exceeding expectations and full-year guidance raised. This signals strong operational execution.
- Cognizant’s mature offshoring business model and recent momentum in large deal wins are viewed as catalysts for sustained growth and market position.
- Selective verticals are showing early signs of sequential acceleration, supporting optimism about future revenue streams.
- There is a belief that Cognizant can outperform near-term estimates, particularly as it navigates current sector transitions.
Bearish Takeaways
- Trailing twelve-month bookings growth has slowed, with large deal signings showing inconsistency. This has contributed to recent declines in quarterly bookings.
- Some analysts remain cautious, maintaining neutral ratings and emphasizing the presence of structural challenges, particularly those related to the ongoing transformation in IT services.
- The price target reductions underscore lingering concerns about the sustainability of recent momentum and headwinds facing the broader sector.
- Risks tied to evolving artificial intelligence trends and cyclical pressures may limit near-term valuation upside despite recent operational improvements.
What's in the News
- President Trump is expected to sign a proclamation requiring a $100,000 payment for H-1B visa applications, which could impact outsourcing firms including Cognizant (Bloomberg).
- Cognizant announced the integration of Anthropic's Claude AI models to accelerate enterprise AI deployment and enhance internal productivity across engineering, software modernization, agentification, industry solutions, and responsible AI practices.
- The company provided earnings guidance for Q4 2025 and full year 2025, projecting revenue between $5.27 billion and $5.33 billion for Q4, and $21.05 billion and $21.10 billion for the full year, signaling expected growth of up to 6.9%.
- Cognizant completed a share buyback tranche, repurchasing over 6.3 million shares for $450.05 million, totaling nearly 30% of shares repurchased since 2017.
- Cognizant formed a partnership with Rubrik to deliver Business Resilience-as-a-Service, addressing increasing cyber threats and aligning IT recovery with business continuity objectives.
Valuation Changes
- Fair Value has risen slightly from $84.39 to $84.86, reflecting updated analyst assessments.
- Discount Rate increased marginally from 8.95% to 9.03%, indicating slightly higher perceived risk or required return.
- Revenue Growth projections decreased modestly from 4.83% to 4.69%, suggesting a tempered outlook for top-line expansion.
- Net Profit Margin improved from 12.50% to 12.90%, highlighting stronger profitability expectations.
- Future P/E ratio fell from 17.24x to 15.85x, which implies a reduction in the company's forward valuation multiple.
Disclaimer
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