We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What's in Store for Cognizant (CTSH) this Earnings Season?
Read MoreHide Full Article
Cognizant Technology Solutions Corp (CTSH - Free Report) is set to report second-quarter 2017 results on Aug 3. In the trailing four quarters, the company has beat the Zacks Consensus Estimate in three occasions, with an average positive surprise of 5.06%.
Last quarter, Cognizant delivered a positive earnings surprise of 5.33%. Revenues of $3.546 billion beat the Zacks Consensus Estimate of $3.522 billion and grew 10.7% on a year-over-year basis.
For the second quarter of 2017, Cognizant expects revenues in the range of $3.63–$3.68 billion. Non-GAAP earnings are expected to be 89 cents per share.
Shares of Cognizant have gained 48.5% year to date, significantly outperforming the industry’s 18.2% rally.
Let’s see how things are shaping up for this announcement.
Factors at Play
Cognizant is consistently developing its capabilities to benefit from the ongoing digital transition, especially when it comes to integration of the new digital framework with legacy technology platforms. Accretive acquisitions have been a key catalyst in this regard.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Over the past few years, Cognizant outpaced its Tier-1 peers on account of more exposure to fast-growing verticals like Financial Services and Healthcare. High quality, lower cost technology services and strategic partnership with the likes of Microsoft (MSFT - Free Report) and SAP SE are also big positives for the company.
Moreover, Cognizant’s expansion into Latin America with the opening of the new center in Sao Paulo, Brazil is positive for the company’s top-line growth. Further, lower share count due to aggressive share buyback is expected to drive earnings in the going-to-be reported quarter.
However, the company is witnessing some sluggishness of late in the healthcare and financial sector. Stiff competition from peers like Accenture, Infosys and Wipro is a major concern.
Moreover, second-quarter earnings is expected to be negatively impacted by additional costs related to severance (including voluntary separation program) lease termination and other facility-related shutdown costs as well as higher advisory fees.
Earnings Whispers
However, our proven model does not conclusively show that Cognizant is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Cognizant’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 82 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cognizant carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks which, as per our model, have the right combination of elements to post an earnings beat this quarter:
NetEase (NTES - Free Report) has an Earnings ESP of +0.25% and holds a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
What's in Store for Cognizant (CTSH) this Earnings Season?
Cognizant Technology Solutions Corp (CTSH - Free Report) is set to report second-quarter 2017 results on Aug 3. In the trailing four quarters, the company has beat the Zacks Consensus Estimate in three occasions, with an average positive surprise of 5.06%.
Last quarter, Cognizant delivered a positive earnings surprise of 5.33%. Revenues of $3.546 billion beat the Zacks Consensus Estimate of $3.522 billion and grew 10.7% on a year-over-year basis.
For the second quarter of 2017, Cognizant expects revenues in the range of $3.63–$3.68 billion. Non-GAAP earnings are expected to be 89 cents per share.
Shares of Cognizant have gained 48.5% year to date, significantly outperforming the industry’s 18.2% rally.
Let’s see how things are shaping up for this announcement.
Factors at Play
Cognizant is consistently developing its capabilities to benefit from the ongoing digital transition, especially when it comes to integration of the new digital framework with legacy technology platforms. Accretive acquisitions have been a key catalyst in this regard.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation Price and EPS Surprise | Cognizant Technology Solutions Corporation Quote
Over the past few years, Cognizant outpaced its Tier-1 peers on account of more exposure to fast-growing verticals like Financial Services and Healthcare. High quality, lower cost technology services and strategic partnership with the likes of Microsoft (MSFT - Free Report) and SAP SE are also big positives for the company.
Moreover, Cognizant’s expansion into Latin America with the opening of the new center in Sao Paulo, Brazil is positive for the company’s top-line growth. Further, lower share count due to aggressive share buyback is expected to drive earnings in the going-to-be reported quarter.
However, the company is witnessing some sluggishness of late in the healthcare and financial sector. Stiff competition from peers like Accenture, Infosys and Wipro is a major concern.
Moreover, second-quarter earnings is expected to be negatively impacted by additional costs related to severance (including voluntary separation program) lease termination and other facility-related shutdown costs as well as higher advisory fees.
Earnings Whispers
However, our proven model does not conclusively show that Cognizant is likely to beat earnings this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as you will see below.
Zacks ESP: Cognizant’s Earnings ESP is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at 82 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Cognizant carries a Zacks Rank #3, which increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
We caution against stocks with a Zacks Rank #4 and 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks to Consider
Here are some stocks which, as per our model, have the right combination of elements to post an earnings beat this quarter:
CACI International (CACI - Free Report) has an Earnings ESP of +1.83% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
NetEase (NTES - Free Report) has an Earnings ESP of +0.25% and holds a Zacks Rank #2.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>