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Tickers in this Article: CTSH
Cognizant Technology (Nasdaq:CTSH) is expected to report increased earnings when it releases its third quarter results on Wednesday, November 7, 2012. The consensus estimate is anticipating a profit of 87 cents a share, an increase from last year's 73 cents per share.

Earnings season is important to investors because it shows how much profit is left in the company's hand after deducting costs from revenue. SEE: How To Decode A Company's Earnings Reports

What to Expect: Cognizant is expected to report 87 cents per share, up 19.2% from a year ago when the company reported earnings of 73 cents per share.

Though it hasn't changed in the last month, the consensus estimate is up from 86 cents three months ago. For the fiscal year, analysts are projecting earnings of $3.38 per share.

Revenue is expected to exceed last year's figure of $1.6 billion by 17.4% and come in at $1.88 billion for the quarter. The anticipated revenue for the fiscal year is $7.34 billion.

Company Performance: Over the past four quarters, Cognizant has reported double-digit year-over-year revenue growth. It has risen by an average of 26%, with the biggest increase of 31.6% coming in the third quarter of the last fiscal year.

CTSH's P/E ratio is 21.4. Perhaps one of the most widely-used stock analysis tools is the price-to-earnings ratio, or P/E. A high P/E ratio indicates a stock that is expensive, while a low P/E ratio indicates a stock that is cheap. SEE: Can Investors Trust the P/E Ratio?

Over the past quarter, the stock price has increased from $64.21 on August 6, 2012 to $67.21. Cognizant's best recent streak was when its price gained $3.74 per share between September 11, 2012 and September 14, 2012.

The Competition: Cognizant Technology Solutions provides custom IT consulting and technology services as well as outsourcing services for companies in North America, Europe, and Asia. Twenty-one of 22 analysts give Cognizant a buy rating. This rating hasn't changed in three months.

The company's closest competitor in the software and programming industry is Infosys Ltd (INFY). Analysts are more optimistic about Cognizant than about Infosys Ltd. Only three out of 16 analysts rate the latter a buy.

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