Analyst Estimates: Here's What Brokers Think Of Cognizant Technology Solutions Corporation (NASDAQ:CTSH) After Its Second-Quarter Report

The investors in Cognizant Technology Solutions Corporation's (NASDAQ:CTSH) will be rubbing their hands together with glee today, after the share price leapt 22% to US$55.35 in the week following its second-quarter results. Cognizant Technology Solutions reported US$5.5b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$1.36 beat expectations, being 3.9% 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.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Following the latest results, Cognizant Technology Solutions' 29 analysts are now forecasting revenues of US$22.2b in 2026. This would be a modest 2.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to ascend 13% to US$5.58. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$22.3b and earnings per share (EPS) of US$5.47 in 2026. 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.

See our latest analysis for Cognizant Technology Solutions

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$63.10. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Cognizant Technology Solutions at US$84.00 per share, while the most bearish prices it at US$42.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. The analysts are definitely expecting Cognizant Technology Solutions' growth to accelerate, with the forecast 5.3% annualised growth to the end of 2026 ranking favourably alongside historical growth of 3.2% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to see revenue growth of 15% annually. So it's clear that despite the acceleration in growth, Cognizant Technology Solutions is expected to grow meaningfully slower than the industry average.

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. We have forecasts for Cognizant Technology Solutions going out to 2028, and you can see them free on our platform here.

You can also view our analysis of Cognizant Technology Solutions' balance sheet, and whether we think Cognizant Technology Solutions is carrying too much debt, for free on our platform here.

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

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.