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what it is
Cognizant helps big companies build, fix, and run their software, often with teams split between client sites and India.
how it gets paid
Last year Cognizant Tech made $21.1B in revenue. Health Sciences was the main engine at $6.3B, or 30% of sales.
why it's growing
Revenue grew 7.0% last year. Cognizant likely had a strong 2025 after multiple years of treading water and multiple initiatives aimed at spurring growth.
what just happened
Cognizant reported $1.35 in EPS last quarter, which matched estimates and kept the steady-execution story intact.
At a glance
A+ balance sheet — rock-solid finances — built to survive anything
95/100 earnings predictability — you can trust these numbers
16.1x trailing p/e — the market's not buying it — or you found a deal
1.9% dividend yield — cash in your pocket every quarter
17.5% return on capital — nothing to write home about
xvary composite: 87/100 — above average
What they do
Cognizant helps big companies build, fix, and run their software, often with teams split between client sites and India.
Cognizant wins on scale and stickiness. It had 336,800 employees at the end of 2024, and its revenue was split across four end markets, with the largest at just 30%, so one customer bucket does not run the whole show. If your bank or health insurer hands Cognizant core software work, switching vendors means moving people, code, and process at the same time. That is switching costs (painful to leave) → clients stay longer → revenue holds up better.
How they make money
$21.1B
annual revenue · their business grew +7.0% last year
Health Sciences
$6.3B
Financial Services
$6.1B
Products and Resources
$5.1B
Communications, Media, and Technology
$3.6B
The products that matter
enterprise IT outsourcing and software work
IT Services
$21.1B revenue · +4.2%
it is the whole business on this page: $21.1B in revenue with 12.3% net margin. if growth slows here, there is nowhere else to hide.
100% of revenue shown
Key numbers
$5.60
fy2026 eps est
$26B
fy2028 rev est
16.1x
trailing p/e
1.9%
dividend yield
Financial health
A+
strength
- balance sheet grade A+ — near the highest rating possible
- risk rank 1 — safer than 95% of stocks
- price stability 85 / 100
- long-term debt $551M (1% of capital)
- net profit margin 13.5% — keeps 14 cents of every dollar in revenue
- return on equity 18% — $0.18 profit for every $1 investors have put in
A+ — among the top-rated companies for balance sheet quality.
Total return vs. market
You invested $10,000 in CTSH 3 years ago → it's now worth $13,900.
The index would have given you $14,770.
source: institutional data · total return
What just happened
beat estimates
Cognizant reported $1.35 in EPS last quarter, which matched estimates and kept the steady-execution story intact.
The business is still growing, with annual revenue at $21.1B, up 7.0% vs. prior year. The bigger point is that margins stayed solid in a cautious client-spending backdrop.
$5.1B
annual revenue
$1.35
last EPS
20.0%
operating margin
the number that mattered
The number that mattered was 20.0% operating margin, because that tells you Cognizant kept profit discipline even while clients stayed careful on new projects.
-
cognizant’s latest quarter showed steady execution in a cautious spending backdrop.
-
revenue grew 7% in the third quarter of 2025 on a constantcurrency basis, to $5.4 billion, and adjusted operating margin improved to just under 19%, helped by tighter cost control and a delivery model that is becoming increasingly centered around automation.
-
clients are still being careful with discretionary projects, partly due to trade-policy uncertainty, but are showing greater willingness to spend on work that has clear payoffs, such as cutting costs, consolidating vendors, and modernizing systems to integrate artificial intelligence (ai) in dayto-day operations.
-
cognizant is wellpositioned to address these current client priorities.
-
the company will need to grind out any gains in 2026.cognizant likely had a strong 2025 after multiple years of treading water and multiple initiatives aimed at spurring growth. after reaping much of these fruits last year, 2026 looks like it may be a greater challenge, but the building blocks are there.
source: wall street consensus and company filings, 2026
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What could go wrong
the #1 risk is client concentration inside a people-based services model.
med
large-client budget cuts
When a few big enterprise clients slow spending, an IT services company feels it quickly. This page already flags concentration risk. That usually means the revenue base looks diversified until one customer pauses a major program.
If a top client cuts work, the effect hits revenue first and utilization second. That is a two-step hit to a business making 12.3% net margin.
med
profit pressure despite better revenue
The latest quarterly setup shows revenue up 7% while EPS is down 52% from a year ago. That is the kind of spread you do not ignore in a services company. It suggests pricing, utilization, mix, or costs are doing something less friendly than the top line implies.
If that pattern continues, the stock stays cheap for a reason. A 16.1x p/e only works as protection if earnings are actually stable.
med
no hard moat
Cognizant has scale and delivery muscle, but this is still a competitive outsourcing market. You can replace a vendor. It is painful, not impossible.
That caps how much multiple expansion you should expect. Dependability can earn you a fair valuation. It rarely earns you a heroic one.
The combined risk picture is simple: one-business revenue concentration plus a 12.3% margin means even modest client losses or cost pressure can matter more than the balance sheet suggests.
source: institutional data · regulatory filings · risk analysis
Pay attention to
metric
watch whether revenue stays closer to 7.0% than 4.2%
The page shows both numbers. If the higher growth rate was temporary, the valuation is probably fair already.
risk
client concentration updates
Any disclosure around fewer large customers, delayed programs, or spending cuts matters because this is a people-heavy model with limited room to absorb idle capacity.
cal
the next earnings print
After revenue up 7% and EPS down 52%, you want to know which line normalizes first.
trend
institutional flow
444 buyers versus 463 sellers is not dramatic, but it is still net selling. You want that trend flat or improving, not quietly worse.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they think the stock has decent near-term support.
risk profile
safest 5%
stability score 1 — lower risk of permanent damage than almost any stock in the market.
chart momentum
top 20%
technical score 2 — the chart has been better than average, even if nobody is mistaking this for a momentum darling.
earnings predictability
95 / 100
Management usually guides within a tight band. That makes surprises rarer — and excuses weaker when they do happen.
source: institutional data
Institutional activity
444 buyers vs. 463 sellers in 3q2025. total institutional holdings: 0.5B shares.
source: institutional data
Price targets
3-5 year target range
$69
$118
$85
current price
$94
target midpoint · +11% from current · 3-5yr high: $135 (+60% · 13% ann'l return)
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The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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