Cognizant (CTSH) to Report Q4 Earnings: What's in Store?
Cognizant Technology Solutions CTSH is scheduled to report its fourth-quarter 2022 results on Feb 2.
The company’s fourth-quarter 2022 revenues are expected between $4.72 billion and $4.77 billion, indicating growth of 2-3% on a constant-currency basis from the year-ago reported figure.
The Zacks Consensus Estimate for revenues is pegged at $4.77 billion, suggesting a decrease of 0.17% from the year-ago quarter’s reported number.
The consensus mark for fourth-quarter earnings has declined a penny to $1.01 per share over the past 30 days, suggesting a year-over-year decline of 8.18%.
Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation price-eps-surprise | Cognizant Technology Solutions Corporation Quote
Cognizant beat the Zacks Consensus Estimate for earnings in three of the trailing four quarters, meeting in the remaining one, the average surprise being 3.55%.
Factors to Note
Cognizant’s fourth-quarter 2022 performance is expected to have benefited from significant growth in its digital business operations reflecting momentum in AI, AR, automation, blockchain, IoT, quantum computing and as-a-service solutions.
Cognizant is experiencing strong growth in its digital revenues as companies worldwide are going through a digital transformation. It has been experiencing solid demand across its various segments, including Finance, Healthcare, and Communications, Media and Technology.
The declining attrition rate on a sequential basis is expected to have benefited Cognizant’s performance.
However, challenging macroeconomic conditions, raging inflation and higher interest rates are expected to have hurt top-line growth.
Moreover, declining discretionary spending on digital projects, as well as fewer priority projects, is likely to have hurt growth. Weakness in banking, especially in the mortgage segment, Health Sciences and retail has been a headwind.
Sluggish continental Europe has been another concern for Cognizant.
What Our Model Says
Per the Zacks model, the combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Although Cognizant currently has an Earnings ESP of -0.74% but a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are a few companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:
Cambium Networks CMBM has an Earnings ESP of +9.27% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cambium shares have declined 16.6% in the past year. CMBM is set to report its fourth-quarter 2022 results on Feb 16.
Bruker BRKR has an Earnings ESP of +3.89% and a Zacks Rank of 2 at present.
Bruker shares have gained 6% in the past year. BRKR is set to report its fourth-quarter 2022 results on Feb 9.
Perion Network PERI has an Earnings ESP of +13.40% and a Zacks Rank #3.
Perion shares have gained 53.9% in the past year. PERI is set to report its fourth-quarter 2022 results on Feb 8.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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