Core Insights - Cognizant Technology Solutions (CTSH) shares have increased by 9.8% over the past month, outperforming the broader Zacks Computer & Technology sector, which rose by 1.1% [1] - The company is experiencing growth due to investments in AI, a strong client base, and an expanding partner network [2][3] Financial Performance - In Q3 2025, Cognizant secured six large deals with a total control value (TCV) of $100 million or more, bringing the year-to-date total to 16 [2] - The operating margin improved by 70 basis points year-over-year in Q3 2025, with expectations for a 15.7% adjusted operating margin in 2025, up 40 basis points from 2024 [2] - Fourth-quarter 2025 revenue is projected to be between $5.27 billion and $5.33 billion, indicating growth of 3.8-4.8% [8] - The Zacks Consensus Estimate for fourth-quarter 2025 revenues is $5.31 billion, reflecting a year-over-year growth of 4.43% [9] - For 2025, revenues are expected to be between $21.05 billion and $21.10 billion, indicating growth of 6.6-6.9% [10] AI and Technology Integration - Cognizant's partnership with Anthropic is enhancing its AI ecosystem, integrating tools to help clients embed AI into their operations [3][5] - The company’s AI-led productivity strategy has resulted in approximately 30% of internal code being AI-generated in Q3 2025, with expectations to reach 50% in the future [6] - Cognizant's Flowsource platform, which integrates generative and agentic AI, has gained traction with over 70 clients [7] Partnerships and Services - An expanded partnership with Rubrik aims to provide Business Resilience-as-a-Service (BRaaS) to help clients recover from cyber incidents [4] - The integration of Anthropic's tools is expected to enhance client capabilities in managing performance, risk, and spending [3]

Core Insights - Cognizant Technology Solutions Corp. is exploring productivity tracking through mouse and keyboard movement, which may lead to increased scrutiny of employee activity [1][2] - The company has introduced a course for executives on workforce-management tools like ProHance, indicating a shift towards micro-tracking employee activities [2][4] Company Initiatives - The course specifies that employees will be marked "idle" if there is no activity for over 300 seconds and will be considered engaged in "activities away from the system" after 15 minutes of inactivity [3][10] - Cognizant does not currently plan to use these tracking tools for performance evaluations, but they will be used to assess time efficiency [4][9] - The company aims to understand client process steps and related time metrics to identify inefficiencies, as stated by a spokesperson [5] Industry Context - The use of workforce-management tools like ProHance is becoming common in the industry, with other firms such as Tesco and Wipro also employing similar systems [6][17] - Analysts suggest that Cognizant's actions are driven by client demand for productivity evidence, the shift to AI revealing inefficiencies, and the need for margin protection [7][8] - The trend of micro-productivity tracking is gaining traction across various sectors, despite concerns about privacy and employee morale [17][18] Financial Performance - Cognizant reported a revenue of $19.74 billion for the fiscal year 2023-24, reflecting a year-on-year increase of 1.98% [15] - The company has projected an annual growth rate of 6.6-6.9% for 2025, translating to expected revenues of $21.05-21.1 billion [15] Employee Sentiment - Some employees express confusion regarding the company's micro-management approach, noting that such tracking is uncommon [16] - Concerns about privacy and the implications of micro-management are prevalent among employees, as these tools become more standard in the industry [18]

Core Insights - The article emphasizes the importance of utilizing Zacks Premium for investors to enhance their stock market strategies and confidence in investing [1] Zacks Style Scores - Zacks Style Scores are complementary indicators that rate stocks based on value, growth, and momentum methodologies, helping investors identify stocks likely to outperform the market in the next 30 days [2] - Each stock is rated from A to F based on its characteristics, with A indicating the highest potential for outperformance [3] Value Score - The Value Score focuses on identifying undervalued stocks using financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [4] Growth Score - The Growth Score assesses a company's financial health and future outlook, analyzing projected and historical earnings, sales, and cash flow to find stocks with sustainable growth [5] Momentum Score - The Momentum Score helps investors capitalize on price trends by evaluating short-term price changes and earnings estimate revisions [6] VGM Score - The VGM Score combines the three Style Scores to identify stocks with attractive value, strong growth forecasts, and promising momentum, serving as a useful indicator alongside the Zacks Rank [7] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to guide investors, with 1 (Strong Buy) stocks achieving an average annual return of +23.93% since 1988, significantly outperforming the S&P 500 [8][9] - Investors are encouraged to focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B for optimal returns [10] Company Spotlight: Cognizant Technology Solutions Corporation - Cognizant is a leading professional services company with a Zacks Rank of 2 (Buy) and a VGM Score of A, making it a strong candidate for growth investors [11] - The company is projected to achieve year-over-year earnings growth of 10.5% for the current fiscal year, supported by positive earnings estimate revisions and an average earnings surprise of +5.8% [12]

Core Points - Cognizant has been recognized as one of America's Best Employers for Veterans 2025 by Forbes, highlighting its commitment to supporting veterans [1][3] - The recognition is based on an independent survey of over 17,000 U.S. veterans, evaluating various factors including workplace atmosphere, salary, diversity, and veteran-specific support [2][3] - Cognizant's Veterans Network affinity group aids service members and military spouses in transitioning to new roles, while also supporting initiatives like Code Platoon for technical training [3][4] Company Commitment - Cognizant emphasizes the unique skills and perspectives that veterans bring to the workforce, which contribute to team strength and innovation [4] - The company is dedicated to creating pathways for veterans and their families to achieve success in their careers [4][5] Industry Context - The recognition by Forbes is part of a broader trend of companies increasingly focusing on veteran support and inclusion in the workplace [2][3] - Statista, the organization collaborating with Forbes, is known for its extensive industry rankings and data analysis, reinforcing the credibility of the recognition [4][5]

Core Insights - Cognizant is leveraging Anthropic's Claude large language models to enhance AI capabilities for enterprise clients, aiming to transition from AI experimentation to scalable business outcomes [1][3][4] - The partnership focuses on integrating Claude's capabilities with Cognizant's engineering platforms to deliver measurable impacts and improve productivity across various corporate functions [2][6] Integration and Implementation - Cognizant plans to align its software engineering and platform offerings with Anthropic's Claude, including tools like Claude for Enterprise and Claude Code, to facilitate AI integration with existing systems [2][6] - The initiative aims to help clients identify high-value use cases and move them into production, thereby enabling measurable outcomes [5][6] Focus Areas - Key focus areas for the partnership include: - Software engineering productivity through accelerated coding tasks and DevOps workflows using Claude and Cognizant's Flowsource Platform [7] - Legacy modernization by combining Cognizant's frameworks with Anthropic's code understanding capabilities [7] - Development of industry-specific solutions, starting with Financial Services, to embed agentic workflows into regulated environments [7] - Advancing responsible AI practices for safe deployment and monitoring aligned with enterprise governance [7] Internal Application - Cognizant will provide Claude to up to 350,000 associates across key functions to enhance productivity and advance AI maturity within the company [4][6]

Core Viewpoint - Growth investors seek stocks with above-average financial growth, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Earnings Growth - Earnings growth is a critical factor for growth investors, with double-digit growth being highly desirable [4] - Cognizant's projected EPS growth for this year is 10.1%, surpassing the industry average of 8.9% [5] Asset Utilization Ratio - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for assessing a growth stock's efficiency [6] - Cognizant has an S/TA ratio of 1.04, indicating it generates $1.04 in sales for every dollar in assets, compared to the industry average of 0.88 [6] Sales Growth - Sales growth is another key indicator, with Cognizant expected to achieve a sales growth of 6.6% this year, outpacing the industry average of 5.3% [7] Earnings Estimate Revisions - Trends in earnings estimate revisions are correlated with stock price movements, with positive trends being favorable [8] - Cognizant's current-year earnings estimates have increased by 1.9% over the past month [9] Overall Assessment - Cognizant holds a Zacks Rank of 2 and a Growth Score of B, indicating it is a potential outperformer and a solid choice for growth investors [11]

Core Insights - Anthropic has signed a significant deal with a professional-services firm, aiming to position its Claude models as the preferred AI solution for businesses [1] Company Developments - The partnership represents one of the largest agreements for Anthropic to date, indicating a strategic move to enhance its market presence [1] Industry Trends - The deal reflects a growing trend among AI startups to collaborate with established professional-services firms to drive adoption of their technologies in the business sector [1]

Company Overview - Cognizant Technology Solutions Corporation (CTSH) has a market cap of $35.3 billion and is a leading global professional services company providing consulting, technology, and outsourcing services with a focus on digital transformation in AI, cloud, IoT, and software engineering [1] Stock Performance - CTSH shares have underperformed the broader market over the past 52 weeks, declining 2.5% compared to a 17.6% gain in the S&P 500 Index [2] - Year-to-date, CTSH shares have decreased by 5.7%, while the S&P 500 has risen by 16.3% [2] - The company's stock has also lagged behind the Technology Select Sector SPDR Fund's return of 30.8% over the same period [3] Recent Financial Performance - On October 29, Cognizant reported Q3 2025 adjusted EPS of $1.39 and revenue of $5.42 billion, exceeding estimates [4] - The company raised its full-year adjusted profit forecast to a range of $5.22 to $5.26 per share and lifted the lower end of its annual revenue outlook to $21.05 billion [4] Analyst Expectations - For the fiscal year ending December 2025, analysts expect CTSH's adjusted EPS to grow 10.5% year-over-year to $5.25 [5] - Cognizant has a promising earnings surprise history, having beaten consensus estimates in the last four quarters [5] - Among 25 analysts covering the stock, the consensus rating is a "Moderate Buy," with seven "Strong Buys," one "Moderate Buy," and 17 "Holds" [5] Price Target and Analyst Ratings - On October 30, JPMorgan raised its price target on Cognizant to $92 while maintaining an "Overweight" rating [7] - The mean price target of $85.28 indicates an 18.2% premium to CTSH's current price levels, while the highest price target of $103 suggests a potential upside of 42.7% [7]

Core Viewpoint - Cognizant Technology Solutions Corp. generates more revenue than Infosys Ltd but is valued at only half of Infosys' market capitalization, indicating a significant valuation arbitrage opportunity as Cognizant considers a dual listing in India [1][2]. Group 1: Financial Comparison - Infosys has a market capitalization of $70.5 billion, while Cognizant is valued at $35.01 billion, despite both companies reporting comparable revenues of $19.74 billion and $19.28 billion, respectively [2]. - Cognizant's price-to-earnings (P/E) ratio stands at 16.59, compared to 18-25 for its Indian peers, suggesting a lower valuation despite generating more business than Infosys, HCL Technologies, and Wipro [5]. Group 2: Strategic Moves - Cognizant is in the exploratory phase of a dual listing in India, which could enhance its share value and attract investments from India-specific funds [6][7]. - The potential listing in India is seen as a way to unlock value and improve valuations, as it would allow Cognizant to access capital from India-centric funds [7]. Group 3: Market Dynamics - The rise of Generative AI is prompting Cognizant to consider a listing in India to gain financial flexibility for investments in AI platforms and automation, which are essential for adapting to changing market conditions [8][9]. - Cognizant's operating margins were reported at 14.7%, significantly lower than Tata Consultancy Services' 24.3% and Infosys' 21.1%, highlighting the need for strategic adjustments in response to competitive pressures [9]. Group 4: Historical Context - Cognizant was established in 1994 and became a separate entity in 1996, marking its entry into the US market during the Y2K boom, which positioned it as a key player in the IT services sector [4][11]. - The company experienced significant growth post-2008 financial crisis due to strategic reinvestments, but faced challenges in the following decade, leading to changes in leadership and a focus on recovery [12][13]. Group 5: Recent Performance - Cognizant reported a revenue of $5.42 billion in the last quarter, marking a 3.2% sequential increase and its best performance in four quarters, alongside signing three deals valued over $500 million [14].

Core Viewpoint - Cognizant Technology Solutions is considering a potential Initial Public Offering (IPO) and secondary listing in India, as stated by the Chief Financial Officer Jatin Dalal during an investor call following the company's September quarter earnings [1][2]. Company Plans - The company is currently engaging with stakeholders in both India and the US to assess the implications of the potential offering and listing [2]. - The process for a primary offering and secondary listing by an overseas company in India is complex and viewed as a long-term project, still in its early phases [2]. Financial Performance - Cognizant reported a revenue of $5.42 billion for the quarter ended September 2025, achieving a 6.5% Constant Currency (CC) revenue growth, exceeding its own revenue guidance [7]. - On a sequential basis, the firm's revenue increased by 2.8% (CC) [7]. - However, net profit saw a significant decline of 53% to $274 million, attributed to a one-time non-cash income tax expense of $390 million [7]. Industry Insights - The financial services vertical has been highlighted as one of Cognizant's best-performing sectors, with clients transitioning from cost-cutting to innovation, particularly in the BFSI sector [4]. - There is an increase in discretionary spending across all segments within financial services, driven by lower deployment costs and higher confidence in experimentation [5]. - In healthcare, Cognizant's TriZetto platform is a key offering, contributing to over 10% growth in the BPO business this year [6].