Core Viewpoint - Growth investors are attracted to stocks with above-average financial growth, but identifying such stocks can be challenging due to their inherent risks and volatility [1] Group 1: Growth Stock Identification - The Zacks Growth Style Score helps identify promising growth stocks by analyzing real growth prospects beyond traditional metrics [2] - Cognizant (CTSH) is currently recommended due to its favorable Growth Score and top Zacks Rank [2] Group 2: Earnings Growth - Earnings growth is crucial for attracting investor attention, with double-digit growth being particularly desirable [4] - Cognizant's projected EPS growth for this year is 10.6%, surpassing the industry average of 10.2% [5] Group 3: Asset Utilization - The asset utilization ratio indicates how efficiently a company generates sales from its assets [6] - Cognizant's S/TA ratio is 1.04, outperforming the industry average of 0.93, indicating higher efficiency [6] Group 4: Sales Growth - Sales growth is another important metric, with Cognizant expected to achieve a 6.7% sales growth this year, compared to the industry average of 5.6% [7] Group 5: Earnings Estimate Revisions - Trends in earnings estimate revisions correlate strongly with stock price movements [8] - Cognizant has seen a 1.8% upward revision in current-year earnings estimates over the past month [9] Group 6: Overall Positioning - Cognizant has a Growth Score of B and a Zacks Rank 2, positioning it well for potential outperformance in the growth investing space [11]

Core Viewpoint - The comparison between Cognizant (CTSH) and CoStar Group (CSGP) indicates that CTSH is more attractive to value investors due to its stronger earnings outlook and favorable valuation metrics [1][3][6] Valuation Metrics - CTSH has a forward P/E ratio of 13.65, significantly lower than CSGP's forward P/E of 79.77, suggesting that CTSH is undervalued relative to CSGP [5] - The PEG ratio for CTSH is 1.47, while CSGP's PEG ratio is 1.91, indicating that CTSH offers better value when considering expected earnings growth [5] - CTSH's P/B ratio stands at 2.32 compared to CSGP's P/B of 3.28, further supporting the notion that CTSH is a more attractive investment [6] Zacks Rank and Style Scores - CTSH holds a Zacks Rank of 2 (Buy), reflecting positive revisions to its earnings estimates, while CSGP has a Zacks Rank of 4 (Sell) [3] - The Style Score Value grade for CTSH is A, indicating strong fundamental metrics, whereas CSGP has a Value grade of F, highlighting its weaker valuation [6]

Core Insights - Investing in stocks based on valuation metrics, particularly the price-to-sales (P/S) ratio, can identify opportunities with strong upside potential, especially for unprofitable or early-stage companies [1][2][10] - Low P/S stocks often trade below their intrinsic value, making them attractive for investors seeking growth at a discount [3][6] - The P/S ratio is preferred over the price-to-earnings (P/E) ratio due to its reliability, as sales are harder to manipulate than earnings [7][10] Company Highlights - **Hamilton Insurance Group, Ltd. (HG)**: Operates in specialty insurance and reinsurance, benefiting from strong execution and a clear growth roadmap. The company has a Zacks Rank 1 and a Value Score of A, with gross premiums written rising significantly [12][13] - **Macy's Inc. (M)**: Undergoing a transformation through its "Bold New Chapter" program, focusing on digital initiatives and omnichannel retailing. The company has a Zacks Rank 2 and a Value Score of A [14][15] - **Cognizant Technology Solutions (CTSH)**: A leading professional services company with strong growth in Health Sciences and Financial Services. The acquisition of Belcan is enhancing its portfolio, and it holds a Zacks Rank 2 with a Value Score of A [16][17] - **PCB Bancorp (PCB)**: Offers a range of banking products and services, with a focus on small and medium-sized businesses. The company has a Zacks Rank 2 and a Value Score of A, positioning it for sustained growth [18][19] - **PRA Group (PRAA)**: Engaged in the purchase and management of non-performing loans, benefiting from strategic acquisitions and a positive purchasing environment. The company has a Zacks Rank 2 and a Value Score of A [20][21]

Core Insights - Cognizant Technology Solutions (CTSH) is enhancing its AI capabilities through the acquisition of 3Cloud, a leading Microsoft Azure service provider, which will add over 1,000 Azure experts and 1,500 Microsoft certifications to its workforce [1][11] - The acquisition will expand Cognizant's Azure portfolio and client base across various sectors, including banking, healthcare, and technology [2][11] - Cognizant's recent acquisitions have contributed significantly to its revenue growth, with an expected inorganic growth impact of 250 basis points for 2025 [3][11] Financial Performance - Cognizant's revenue growth for the trailing nine months of 2025 was 7.6% year over year, reaching $1.12 billion, with recent acquisitions adding approximately 350 basis points to this growth [3] - The company anticipates fourth-quarter 2025 revenues to be between $5.27 billion and $5.33 billion, reflecting a growth of 3.8-4.8% on a reported basis [8] - The Zacks Consensus Estimate for fourth-quarter 2025 revenues is $5.31 billion, indicating a year-over-year growth of 4.43% [9] Strategic Partnerships and AI Integration - Cognizant's expanding partner ecosystem, including companies like Anthropic and Rubrik, is a key driver for its growth, enabling the integration of advanced AI tools into client operations [5] - The company has embedded AI across more than 150 use cases, enhancing productivity and decision-making processes [7] Market Position and Stock Performance - Cognizant's shares have appreciated by 8.9% over the past month, outperforming the Zacks Computers – IT Services industry, which declined by 3% [4] - The company is currently ranked 2 (Buy) by Zacks, indicating a positive outlook in the market [12]

Core Insights - Cognizant has signed a definitive agreement to acquire 3Cloud, a leading independent Microsoft Azure service provider, enhancing its capabilities in data, AI, application innovation, and enterprise cloud platforms [1][3][4] - The acquisition is expected to significantly expand Cognizant's Azure product portfolio and deepen its expertise in complex engineering projects, driving AI-led business transformation [3][5] - 3Cloud has achieved a 20% organic compound annual growth rate since 2020, with expectations to maintain similar growth through 2025, driven by strong demand for Microsoft Azure-based business transformation [3][6] Company Overview - 3Cloud primarily serves enterprise clients across sectors such as banking, healthcare, technology, and consumer goods [3] - The integration will add over 1,000 Azure experts and more than 1,500 Microsoft certifications to Cognizant's existing team of nearly 20,000 Azure-certified employees [3][5] - 3Cloud has been recognized multiple times as a top Microsoft Azure partner, winning various awards for its innovative Azure solutions [6] Strategic Implications - The acquisition is seen as a critical step for Cognizant in advancing its enterprise AI strategy, enabling organizations to rapidly build, deploy, and scale AI solutions [3][4] - Cognizant aims to establish itself as a leading partner within the Azure ecosystem, leveraging 3Cloud's expertise to enhance client value in their AI journeys [4][5] - The deal is expected to close in the first quarter of 2026, pending regulatory approvals and other closing conditions [6]

Core Insights - Cognizant has agreed to acquire 3Cloud, a company specializing in Microsoft Azure services and AI enablement, with the deal expected to close in Q1 2026 pending regulatory approval [1][5] - The acquisition aims to enhance Cognizant's Azure engineering capacity and expand its presence in cloud-based enterprise transformation projects [1] Company Overview - 3Cloud, founded by former Microsoft executives, is a portfolio company of Gryphon Investors and serves enterprise clients across various sectors including financial services, healthcare, technology, and consumer industries [2] - The company is recognized as an Elite Databricks partner, with capabilities in data management, cloud-native AI application development, advanced analytics, and managed services [2] Workforce and Expertise - The acquisition will add over 1,000 Azure specialists from 3Cloud to Cognizant's workforce, integrating more than 1,500 additional Microsoft certifications [3] - Approximately 1,200 employees from 3Cloud, including around 700 based in the US, will join Cognizant's global pool of nearly 20,000 Azure-certified professionals [4] Growth and Market Demand - 3Cloud has experienced a compound annual growth rate of 20% since 2020 and anticipates similar growth through 2025, driven by demand for Azure-based solutions [4] - Microsoft's financials indicate that Azure and related cloud service revenues increased by 40% year-on-year in Q3 2025 [4] Strategic Vision - Cognizant's CEO emphasized that the acquisition is a pivotal step in the company's strategy to empower clients for the future of enterprise AI, leveraging 3Cloud's Azure expertise and longstanding Microsoft partnership [5] - In March 2025, Cognizant announced a strategic partnership with Nvidia to accelerate the adoption of AI technologies across multiple industries [5]

Core Viewpoint - Cognizant is acquiring 3Cloud, a major provider of Microsoft Azure services, to enhance its AI builder strategy as enterprises increasingly adopt AI technology [1][2]. Company Overview - 3Cloud is recognized as an award-winning Microsoft Azure data and AI company, having been named AI data and data partner for Microsoft in 2024 and channel partner of the year for 2025 [3]. - Cognizant aims to leverage 3Cloud's capabilities to bridge the gap between substantial investments in AI infrastructure and the realization of value in end-user industries [5][7]. Market Dynamics - The AI infrastructure market is seeing significant spending, estimated at $300 to $400 billion, with Microsoft Azure experiencing a growth rate of nearly 40% in the last quarter [4]. - Cognizant's CEO highlighted that for the AI infrastructure to yield a 10% return, an annual revenue of $600 billion is necessary, indicating a need for substantial value generation in enterprises [5][9]. Adoption and Transformation - The transition to enterprise AI is described as a slow and steady process, akin to past technological revolutions, requiring time for businesses to adapt and integrate AI effectively [6][11]. - Cognizant positions itself as a facilitator in this transformation, emphasizing the importance of contextual computing to enhance productivity and GDP [7][12]. Strategic Positioning - Cognizant is focused on both organic growth and acquiring boutique companies to strengthen its AI capabilities, aiming to ensure that the value generated from AI investments aligns with infrastructure spending [9][10]. - The company acknowledges the current disparity between infrastructure investment and the realization of business value, indicating that the market is still in the early stages of this transformation [11][12].

Core Insights - Gryphon Investors has entered into a definitive agreement to sell its portfolio company 3Cloud, a leading Microsoft Azure services provider, to Cognizant Technology Solutions Corporation, with the transaction expected to close in Q1 2026 [1][3]. Company Overview - 3Cloud, founded in 2016 and headquartered in Chicago, Illinois, specializes in Microsoft Azure services, offering solutions that optimize business outcomes and is recognized as a global leader in Azure-dedicated AI enablement solutions [2][7]. - The company has a proven track record in modern data engineering, cloud-native AI application development, advanced analytics, and Azure managed services, and is an Elite Databricks partner [2]. Financial Performance - Since Gryphon's initial investment in 2020, 3Cloud has experienced significant growth, with revenue increasing by over 12 times during the five years of partnership, and the company has grown organically at over 20% per year [3]. Strategic Partnership - Gryphon's partnership with 3Cloud has been characterized by strategic guidance and operational support, which has been crucial for the company's growth and positioning for future expansion [4]. - The management team of 3Cloud, including CEO Mike Rocco and President Jim Dietrich, will continue in key roles within Cognizant's Azure practice post-acquisition [3]. Gryphon Investors' Strategy - Gryphon Investors focuses on growing competitively-advantaged companies across various sectors, including technology solutions and services, with over $10 billion in assets under management [5]. - The firm emphasizes forming strong partnerships with management teams to drive transformational growth and value creation [4][5].

Core Viewpoint - Cognizant has entered into a definitive agreement to acquire 3Cloud, enhancing its capabilities in enterprise AI readiness and digital transformation through advanced data and AI solutions [1][3][4] Company Overview - Cognizant is a leading technology company focused on modernizing businesses and transforming experiences for clients [9] - 3Cloud is a prominent Microsoft Azure services provider, recognized for its expertise in cloud strategy, design, implementation, and managed services [10] Acquisition Details - The acquisition will significantly expand Cognizant's Azure portfolio and deepen its expertise in AI-led business transformation [3][6] - 3Cloud has achieved a 20% organic compound annual growth since 2020, with expectations of similar growth in 2025 due to strong demand for Azure services [3] - The deal is expected to close in the first quarter of 2026, pending regulatory approvals [9] Strategic Implications - The integration of 3Cloud's capabilities will create one of the largest global partners to Microsoft in terms of Azure Consumption Revenue [6] - Cognizant aims to empower organizations to rapidly build, deploy, and scale AI solutions, enhancing its end-to-end ecosystem for AI innovation [4][6] - The combined entity will have over 21,000 Azure-certified specialists, positioning it as a highly credentialed partner in the Azure ecosystem [6][8] Market Position - 3Cloud serves a diverse enterprise-scale client base across various sectors, including banking, healthcare, technology, and consumer services [3] - Both companies have received multiple awards from Microsoft, underscoring their leadership and excellence in delivering Azure solutions [8]

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]