Here's What Analysts Are Forecasting For Cognizant Technology Solutions Corporation (NASDAQ:CTSH) After Its Second-Quarter Results

It's been a good week for Cognizant Technology Solutions Corporation (NASDAQ:CTSH) shareholders, because the company has just released its latest second-quarter results, and the shares gained 4.2% to US$76.31. The result was positive overall - although revenues of US$4.9b were in line with what the analysts predicted, Cognizant Technology Solutions surprised by delivering a statutory profit of US$1.14 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. 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' 28 analysts are forecasting 2024 revenues to be US$19.5b, approximately in line with the last 12 months. Per-share earnings are expected to increase 3.5% to US$4.57. Before this earnings report, the analysts had been forecasting revenues of US$19.4b and earnings per share (EPS) of US$4.58 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$78.92. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Cognizant Technology Solutions at US$94.00 per share, while the most bearish prices it at US$70.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Cognizant Technology Solutions shareholders.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cognizant Technology Solutions' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Cognizant Technology Solutions' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.1% growth on an annualised basis. This is compared to a historical growth rate of 4.1% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.7% per year. Factoring in the forecast slowdown in growth, it seems obvious that Cognizant Technology Solutions is also expected to grow slower than other industry participants.

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. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will 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..

Even so, be aware that Cognizant Technology Solutions is showing 1 warning sign in our investment analysis , 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com