January 9, 2025
Cognizant Technology Solutions
CTSH recently announced a new collaboration with Siemens Digital Industries Software to enhance its software-defined vehicle (SDV) solution accelerator by integrating Siemens PAVE360 platform.
The advanced solution, which includes Siemens Simcenter Prescan for sensor modeling and scenario-based testing, is designed to streamline the SDV development process, addressing the growing demands for faster innovation, continuous verification and efficient management of complex software systems.
The collaboration aims to help automotive clients navigate the challenges of increasing customization, hyper-personalization and the complexity of modern vehicle software, ultimately reducing development time and accelerating feature delivery.
Cognizant shares have gained 13.6% in the trailing six-month period compared with the broader Zacks Computer & Technology sector’s return of 2.8%. CTSH is benefiting from an expanding clientele and a strong partner base. A favorable mix of business renewals and expansions of new opportunities are major drivers for Cognizant in 2025.
Cognizant Technology Solutions Corporation price-consensus-chart | Cognizant Technology Solutions Corporation Quote
Cognizant’s expanding partner base, which includes Simens,
ZScaler
ZS,
International Business Machines
IBM and
Palo Alto Networks
PANW, NVIDIA and Amazon, is expected to drive its prospects in 2025.
In the third quarter of 2024, CTSH signed six deals exceeding $100 million each, highlighting its ability to win large and strategic contracts. In total, 19 large deals have been signed in the year-to-date period, outpacing the 17 deals secured in 2023.
Cognizant expanded its partnership with Zscaler in December 2024 to help enterprises transform their security posture with an AI-enabled zero-trust cloud security platform, streamlining policy enforcement, enhancing threat detection, and reducing security complexity at scale.
In November 2024, Cognizant and IBM launched a FinOps Center of Excellence to help clients address challenges in AI readiness, cloud governance and architecture modernization while integrating CTSH’s platforms with IBM’s tools for enhanced cloud management and mainframe modernization.
Cognizant also collaborated with Palo Alto Networks to deliver AI-driven cybersecurity solutions, enhancing security through platformization and reducing complexity for enterprises.
Cognizant’s strong portfolio, along with an expanding partner base, reflects solid top-line growth potential over the long run.
The Zacks Consensus Estimate for 2025 revenues is pegged at $21.02 billion, indicating year-over-year growth of 6.62%.
The consensus mark for earnings is pegged at $4.97 per share, which remained unchanged over the past 30 days. The figure implies a year-over-year increase of 6.58%.
Cognizant’s shares are cheap, as suggested by a Value Score of B.
The forward 12-month Price/Sales ratio for CTSH stands at 1.79, lower than the industry’s 9.74.
However, tight discretionary spending in manufacturing, logistics and telecom sectors, as well as weak software spending in Europe is expected to hurt CTSH’s growth prospects.
Cognizant currently carries a Zacks Rank #3 (Hold), implying that investors should wait for a more favorable entry point to accumulate the stock. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
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