Cognizant Technology Solutions (CTSH) Earnings Likely Positive Catalyst for Shares - BofA Securities

BofA Securities analyst Jason Kupferberg reiterated a Buy rating and $93.00 price target on Cognizant Technology Solutions (NASDAQ: CTSH) ahead of the company reporting F4Q21 on 2/2.

The analyst stated "Since hosting its first Analyst Day under CEO Brian Humphries on 11/18/21, shares of CTSH are up 5% and have outperformed the S&P500 by ~1,140bps. We believe the focus of the call will be on initial F22 guidance, which management provided a preliminary view on at the Analyst Day, suggesting F22 rev growth could be at the high-end of the medium-term (’21-’24) outlook for an 8-11% CAGR, with F22 margin expansion at the low end of the annual 20-40bps target (Exhibit 1). Both BofA and consensus are below the 3-yr guidance at 7.5%/8.5% y/y growth in F22, suggesting upside potential. Top-line growth will be driven by a combination of strong bookings (up 13% YTD with 1.2x book-to-bill TTM as of 3Q21), an accelerating digital mix (~45% expected in ’21, growing high-teens to low-20%) and M&A (2% annual contribution in med-term guide). Although the stock has recently outperformed, CTSH currently trades at 16.9x FY23 P/E, which is merely in-line with its historical forward P/E, and in our view does not adequately discount CTSH’s improving top-line trajectory."

For an analyst ratings summary and ratings history on Cognizant Technology Solutions click here. For more ratings news on Cognizant Technology Solutions click here.

Shares of Cognizant Technology Solutions closed at $85.10 yesterday.

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