One Reason Why Cognizant Technology (CTSH) Stock Is Down Today
NEW YORK (TheStreet) -- Shares of Cognizant Tech Solutions (CTSH) - Get Report are declining 2.43% to $57.51 in mid-afternoon trading on Friday after rival IT company Infosys (INFY) cut its annual revenue forecast.
Infosys and other IT companies have been contending with a shift to customizable Internet-based software and away from outsourcing, Bloomberg reports.
"Global IT spending growth is best described as lackluster," John-David Lovelock, a research vice-president at Gartner, told Bloomberg. "It is precisely this new breadth of alternatives to traditional IT that will fundamentally reshape what is bought, who buys it and how much will be spent."
Infosys CEO Vishal Sikka also pointed to Britain's recent decision to exit the EU and China's economic slowdown as reasons for the lowered sales expectations.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B+.
Cognizant's strengths such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, growth in earnings per share and increase in net income outweigh the fact that the company has had lackluster performance in the stock itself.
You can view the full analysis from the report here: CTSH
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.