Cognizant’s Stock Performance: A Mixed Bag in 2025
Despite some recent gains, Cognizant Technology Solutions Corporation (CTSH) is struggling compared to industry benchmarks.
Cognizant Technology Solutions Corporation (CTSH), based in Teaneck, New Jersey, specializes in consulting, technology, and outsourcing services. With a market capitalization of $41 billion, the company offers expertise in technology strategy consulting, complex systems development, enterprise software implementation, data warehousing, and business intelligence.
Over the past year, CTSH shares have lagged behind the overall market. The stock has only risen 6.4%, while the S&P 500 Index ($SPX) has increased by nearly 20.9%. However, looking at 2025, CTSH stock is up 7.8%, outperforming the SPX, which is up just 1.9% year-to-date.
When comparing performance to the Vanguard Information Technology Index Fund ETF (VGT), CTSH’s struggles become clearer. The ETF saw a gain of about 20.3% in the past year, further highlighting CTSH’s year-to-date performance, which has outpaced the ETF’s decline of 2.2% during the same period.
Several factors contribute to CTSH’s slower growth. Weak spending in the manufacturing, logistics, and telecom sectors, along with sluggish software expenditures in Europe, have negatively impacted revenue growth.
On October 30, after the release of its third-quarter results, CTSH shares fell over 1%. The company reported an adjusted EPS of $1.25, exceeding Wall Street’s expectation of $1.14, while revenue reached $5.04 billion, also surpassing the forecast of $5 billion. For the full fiscal year, CTSH anticipates adjusted EPS to fall between $4.63 and $4.67, while revenue is projected to be between $19.7 billion and $19.8 billion.
For the current fiscal year, ending December 2024, analysts predict CTSH’s EPS will grow by 2.4% to $4.66 on a diluted basis. Notably, the company has consistently surpassed earnings estimates, achieving positive surprises in all four of its most recent quarters.
A survey of 24 analysts covering CTSH reveals a consensus rating of “Moderate Buy.” This includes five analysts suggesting a “Strong Buy,” along with 19 “Holds.”
Compared to two months ago, analyst ratings have improved, with four now recommending a “Strong Buy.”
On January 31, Morgan Stanley (MS) maintained an “Equal Weight” rating on CTSH and raised the price target to $80. The average price target stands at $84.16, indicative of a 1.5% premium to CTSH’s current price. Meanwhile, the highest price target of $100 offers a potential upside of 20.6%.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are provided solely for informational purposes. For more details, please refer to the Barchart Disclosure Policy here.
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