Needham & Company Reiterates a 'Strong Buy' on Cognizant Technology (CTSH); Set To Deliver Strong Upside Results/Guidance On Broad Based Growth

Needham & Company reiterates a 'Strong Buy' on Cognizant Technology Solutions (NASDAQ: CTSH) price target of $100.00.

Needham analyst says, "CTSH will report 3Q results before the open on Wednesday, November 2nd. We are looking for another strong beat and raise performance from CTSH. We are modeling $0.70 in EPS (Street $0.71) on 29% Y/Y and 5.7% Q/Q revenue growth to $1.57 billion (Street $1.577 billion). Despite the uncertain global economic picture, we believe demand for IT offshoring remained strong through the September quarter with the strongest activity in the healthcare and retail segments. We also believe the financial services segment delivered solid growth (CTSH’s exposure to European banks is <5%) and application development continued to outpace application maintenance, indicating clients continue to spend on innovation projects, especially around Cloud and Mobility Computing. Based on CTSH’s history of outperforming its guidance and its peers by 2-3% on Q/Q revenue growth (Infosys-INFY-BUY and TCS-NR delivered 5% Q/Q revenue growth) and strong capabilities in healthcare, the fastest growing vertical, we see the potential for 7-8% Q/Q revenue growth in 3Q and a guide up for FY11, likely by more than the 3Q beat. At 21x our CY12 EPS estimate, valuation remains attractive for a 30%+ secular grower."

For more ratings news on Cognizant Technology Solutions click here and for the rating history of Cognizant Technology Solutions click here.

Shares of Cognizant Technology Solutions closed at $71.09 yesterday.

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