Cognizant (CTSH), Appoints New CEO. Updates Q4 and 2022 View
Cognizant Technology Solutions CTSH shares rose 5.85% to close at $65.10 Jan 12, after the company announced Ravi Kumar as its CEO and member of the board. Ravi Kumar replaces Brian Humphries in both of these roles. Brian Humphries will continue to be a special advisor at Cognizant until March 15, 2023.
Cognizant updated its previous guidance for the fourth-quarter and 2022. The company increased its top-line estimates, but it decreased its operating margins as well as its adjusted earnings guidance.
Ravi Kumar, who was the president of Infosys from October 2022 to October 2022, led Infosys’ Global Services Organization in all segments of global industry.
Surya Gummadi, the president of Cognizant USAs, was also appointed by Cognizant. Ravi Kumar had been initially selected.
Price and Consensus for Cognizant Technology Solutions Corporation
Cognizant Technology Solutions Corporation price-consensus-chart | Cognizant Technology Solutions Corporation Quote
Moreover, Cognizant announced that Stephen J. Rohleder, a member of Cognizant’s board since March 2022, has been elected chair of the board.
Cognizant Riding on Acquisitions & Partnerships
Cognizant shares have dropped 25.3% in the past year, outperforming the Zacks Computer and Technology sector’s fall of 29% over the same time frame.
OneSource Virtual, Utegration and AustinCSI are revenue-accretive acquisitions. A growing partner base includes the likes Microsoft Key catalysts have been MSFT.
OneSource Virtual is a leader in providing virtual services Workday WDAY offers solutions and products. Utegration LLC provides full-service consulting and solutions. SAP’s SAP technology and SAP-certified products for the energy and utilities sectors.
AustinCSI strengthens Cognizant’s footprint across the telecommunications, media, technology and automotive sectors. Cognizant will benefit further from the digital transformation megatrend and increase its market share within the utilities and energy sector by integrating Utegration. This deal will allow Cognizant to implement its SAP fintech solutions to its new clients.
OneSource Vital’s offerings complement Cognizant’s existing finance and HR advisory implementation services with Workday. The transaction will expand Cognizant’s capabilities in consulting, deployment and post-deployment support across North America and the U.K. The transaction is expected closing by the end the fourth quarter in 2022.
Acquisitions have been an integral part of Cognizant’s growth story in recent years. In 2021, Cognizant spent $715 Million on acquisitions. The company spent $715 million in 2021 on acquisitions, which contributed 40 basis point (bps) to its year-overyear revenue growth for the third quarter.
Moreover, Cognizant’s expanding partnership with Microsoft is a key catalyst. The companies recently showcased a new solution — the Cognizant Sustainability Accelerator, powered by the Microsoft Cloud and Microsoft Cloud for Sustainability — at COP27. This solution combines Cognizant’s extensive experience in IoT, data analytics, and Microsoft’s cloud capabilities.
Cognizant reported third quarter 2022 revenues of $4.86 Billion, which was 2.94% less than the Zacks Consensus estimate. The reported figure was within management’s revenue guidance of $4.90-$4.94 billion.
Cognizant predicts that the fourth quarter 2022 revenues will reach $4.8 billion. This is an increase of 4.1% cc. For 2022, revenues are expected at $19.4billion. This represents a 7.5% increase on a cc base.
The adjusted operating margin is expected to decrease by 30 basis points (compared to the previous guidance) and reach 15.3% in 2022. This is due to the impairments of certain capitalized expenses related to large volume-based contracts with Health Sciences customers.
The adjusted earnings for 2022 will be between $4.38 to $4.40 per sen, compared with the $4.43 to $4.46 previously mentioned.
Cognizant, currently ranked #3 on Zacks (Hold), will be reporting fourth-quarter 2022 results Feb 2. You can view the full report here the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Want the latest Zacks Investment Research recommendations? Download 7 Best Stocks in the Next 30 Days Today Click to get this free report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Cognizant Technology Solutions Corporation (CTSH) : Free Stock Analysis Report
SAP SE (SAP) : Free Stock Analysis Report
Workday, Inc. (WDAY) : Free Stock Analysis Report