Yahoo Finance Cognizant (CTSH) to Report Q1 Earnings: What's in Store?
Cognizant Technology Solutions CTSH is scheduled to report its first-quarter 2024 results on May 1.
CTSH expects first-quarter 2024 revenues to be between $4.68 billion and $4.76 billion, indicating a decline of 2.7% to 1.2%. Acquisitions are expected to contribute 100 bps and 20 bps positive impact from favorable forex.
The Zacks Consensus Estimate for the first quarter is pegged at $4.72 billion, indicating a year-over-year decline of 1.89%.
The consensus mark for earnings is pegged at $1.11 per share, unchanged in the past 30 days.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation price-eps-surprise | Cognizant Technology Solutions Corporation Quote
Cognizant’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 10%.
Let’s see how things have shaped up for the upcoming announcement.
Factors to Note
Cognizant’s first-quarter 2024 performance is likely to have benefited from an expanding clientele and a robust pipeline that includes a favorable mix of new opportunities.
Cognizant has been successful in winning large deals, including those exceeding $100 million each, in the fourth quarter of 2023. This is likely to have contributed well in the quarter under review.
Its robust network of partners, which includes the likes of Alphabet GOOGL, is likely to have driven growth during the first quarter.
Cognizant and Alphabet’s cloud business, Google Cloud, recently expanded its partnership to integrate Gemini for Google Cloud, enhancing software delivery lifecycle and developer productivity with AI-powered tools. Benefits from this partnership are likely to have been reflected in the quarter under review.
The company’s robust generative AI capabilities, driven by its growing investments to train thousands of Cognizant’s employees in generative AI, are expected to have been a key growth catalyst for the company in the to-be-reported quarter.
Cognizant sees a significant opportunity in generative AI and plans to invest approximately $1 billion in its generative AI capabilities over the next three years.
CTSH’s NextGen initiative is expected to have played a pivotal role in enhancing operational efficiency in the to-be-reported quarter.
HealthCare Sector Growth to Accelerate in Q1
Cognizant is expected to have strengthened its foothold in the healthcare industry on the back of its growing investments to expand its TriZetto platform and healthcare BPaaS (Business Process as a Service) solution capabilities in first-quarter 2024.
CTSH’s partnership with Microsoft MSFT and NVIDIA NVDA is expected to bolster the performance of the healthcare sector in the first quarter.
Cognizant partnered with Microsoft to incorporate gen-AI into healthcare administration through TriZetto Assistant on Facets, leveraging Azure Open AI Services and Semantic Kernel to boost productivity, efficiency and patient care while maintaining regulatory compliance and data security. This, in turn, is expected to have contributed to overall top-line growth in the to-be-reported quarter.
Cognizant’s collaboration with NVIDIA to integrate gen-AI technology with its drug discovery solutions, is expected to have accelerated development, reduce costs, and improve patients’ outcomes while expanding into other sectors like manufacturing and automotive industries during the first quarter.
However, Cognizant’s weakness in the Financial Services segment and challenging macro environment is expected to have hurt spending rates and affect top-line growth in the to-be-reported quarter.
Cognizant currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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