Cognizant(CTSH) ZACKS·2024-12-13 16:40Core Viewpoint - Cognizant Technology Solutions (CTSH) has experienced a year-to-date share price increase of 6.4%, underperforming the broader Zacks Computer & Technology sector, which returned 33.6% [1]. However, CTSH has outperformed the Zacks Business - Software Services industry, which declined by 23% in the same period [1]. Group 1: Financial Performance - In the third quarter of 2024, the Financial Services sector for CTSH grew by 0.5% in constant currency and 0.7% on a reported basis year-over-year, driven by improved discretionary spending and strong demand from banking clients [3]. - For the fourth quarter of 2024, Cognizant expects revenues between 5.1 billion, indicating growth of 5.1-7.1% [8]. The Zacks Consensus Estimate for fourth-quarter revenues is 19.7-19.72 billion, suggesting a year-over-year growth of 1.88% [10]. - Adjusted earnings per share for 2024 are expected to be between 4.67, with the consensus mark at $4.66 per share, indicating a year-over-year increase of 2.42% [11]. Group 2: Strategic Partnerships and Growth Drivers - Cognizant is benefiting from an expanding clientele and a strong partner base, with business renewals and new opportunities driving growth in 2025 [2]. - The company has seen increased client confidence in digital and cloud transformation investments, particularly in the Financial Services sector [4]. - Cognizant has collaborated with Beyond Bank Australia to enhance its digital banking experience, focusing on operational resilience and customer satisfaction [5]. - The partnership with Zscaler aims to transform enterprise security with an AI-enabled zero-trust cloud security platform [6]. - Collaboration with Palo Alto Networks in the third quarter of 2024 focuses on delivering AI-driven cybersecurity solutions [7]. Group 3: Valuation and Market Position - Cognizant's shares are considered undervalued, indicated by a Value Score of B [13]. - The forward 12-month Price/Sales ratio for CTSH is 1.90, significantly lower than the industry's 14.53 [14]. - The company's strong portfolio and expanding partner base reflect solid top-line growth potential, expected to increase share price in 2025 [14].