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Investing.com - William Blair upgraded Cognizant Technology Solutions (NASDAQ:CTSH) from Market Perform to Outperform on Friday, citing the company’s accelerated AI-focused strategy and improved operational execution. The stock, currently trading at $72.35, has seen 9 analysts revise their earnings upwards for the upcoming period according to InvestingPro data.
The research firm highlighted Cognizant’s entry into "a new phase of growth and profitability" driven by its AI initiatives, better execution, and strengthening demand across key verticals.
William Blair noted that Cognizant recently posted a solid third quarter with revenue growth exceeding both guidance and consensus expectations, with momentum expected to continue into 2026 as recently signed large deals begin to ramp up. The company reported 7.4% revenue growth over the last twelve months, with forecasts suggesting continued growth of around 7% for fiscal year 2025.
The firm pointed to Cognizant’s current valuation as presenting an attractive opportunity for investors, with shares trading at $72.35, representing 13.1 times William Blair’s next-12-months adjusted EPS estimate.
This valuation sits nearly 30% below the peer group average of 18.1 times and below the stock’s trailing 3- and 5-year average multiples of 15.2x and 15.7x, according to William Blair’s analysis.
In other recent news, Cognizant Technology Solutions reported strong third-quarter 2025 earnings, surpassing analyst expectations. The company posted earnings per share of $1.39, exceeding the forecast of $1.30, and achieved revenue of $5.42 billion, higher than the expected $5.32 billion. Additionally, Cognizant’s revenue growth in constant currency terms accelerated by approximately 80 basis points to around 4.0% year-over-year, with an improved adjusted operating margin increasing 70 basis points. In a strategic move, Cognizant has entered into a definitive agreement to acquire 3Cloud from Gryphon Investors, with the transaction expected to close in the first quarter of 2026. Financial terms of this acquisition were not disclosed. Furthermore, Mizuho raised its price target on Cognizant to $85 from $84, maintaining a Neutral rating, following the company’s robust quarterly results. Cognizant has also been selected by the Coalition for Epidemic Preparedness Innovations to implement a digital transformation program, which includes a new HR and Expense Management System. These developments highlight Cognizant’s ongoing efforts to enhance its market position and operational capabilities.
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