Cognizant Technology Solutions (CTSH) Stock Lower Ahead of Earnings Results

Cognizant Technology Solutions (CTSH) will release its latest financial report before the market open on Wednesday morning.
By Amanda Schiavo ,

NEW YORK (TheStreet) -- Shares of Cognizant Technology Solutions (CTSH) - Get Report are down by 0.10% to $68.36 on Tuesday afternoon, one day prior to the release of the information technology provider's 2015 third quarter earnings results.

The company will release its latest financial report before the market open on Wednesday morning.

Analysts are expecting Cognizant Technology Solutions to post a year over year increase in earnings per share and revenue for the most recent quarter.

The company has been forecast to report earnings of 76 cents per share on revenue of $3.16 billion for the three month period ending in September, according to analysts surveyed by Thomson Reuters.

Cognizant Technology Solutions' earnings came in at 66 cents per share on revenue of $2.58 billion for the 2014 third quarter.

Based in Teaneck, NJ the company operates in four segments providing information technology, consulting and business process services.

Separately, TheStreet Ratings team rates COGNIZANT TECH SOLUTIONS as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

We rate COGNIZANT TECH SOLUTIONS (CTSH) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 27.2%. Since the same quarter one year prior, revenues rose by 22.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CTSH's debt-to-equity ratio is very low at 0.12 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 3.13, which clearly demonstrates the ability to cover short-term cash needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 47.43% over the past year, a rise that has exceeded that of the S&P 500 Index. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
  • COGNIZANT TECH SOLUTIONS has improved earnings per share by 11.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COGNIZANT TECH SOLUTIONS increased its bottom line by earning $2.35 versus $2.02 in the prior year. This year, the market expects an improvement in earnings ($3.04 versus $2.35).
  • You can view the full analysis from the report here: CTSH
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