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Cognizant (CTSH) to Report Q1 Earnings: What's in Store?

Cognizant Technology Solutions CTSH is scheduled to report first-quarter 2023 results on May 3.

The company’s first-quarter 2023 revenues are expected between $4.71 billion and $4.76 billion, indicating a decline of 1% to flat on a constant-currency (cc) basis from the year-ago quarter’s reported figure.

The Zacks Consensus Estimate for revenues is pegged at $4.74 billion, suggesting a decline of 1.86% from the year-ago quarter’s reported number.

The consensus mark for first-quarter earnings has remained unchanged to $1.05 per share in the past 30 days, suggesting year-over-year decline of 2.78%.

Cognizant Technology Solutions Corporation Price and EPS Surprise

 

Cognizant Technology Solutions Corporation Price and EPS Surprise
Cognizant Technology Solutions Corporation Price and EPS Surprise

Cognizant Technology Solutions Corporation price-eps-surprise | Cognizant Technology Solutions Corporation Quote

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Cognizant beat the Zacks Consensus Estimate for earnings in two of the trailing four quarters and meeting in the remaining two, the average surprise being 2.11%.

Let’s see how things have shaped up for the upcoming announcement.

Factors to Note

Cognizant’s first-quarter 2023 performance is expected to have benefited from significant growth in its digital business operations, reflecting momentum in AI, health sciences, automation, IoT, quantum computing and as-a-service solutions.

It is experiencing strong growth in its digital revenues as companies worldwide are going through a digital transformation while reducing costs. It has been experiencing solid demand across its various segments including Healthcare, Communications, Media and Technology.

Cognizant banks on a long-standing client relationship, robust product pipeline and a global delivery network. It has been leveraging on TriZetto’s portfolio of solutions to expand partnerships in the healthcare market. These factors are likely to have driven its first-quarter top line.

Declining attrition rate on a sequential basis is expected to have benefited Cognizant’s performance.

However, challenging macroeconomic conditions, raging inflation and regulatory complexity are expected to have hurt top-line growth. Weakness in its banking and financial service solutions has been a potential headwind.

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.

Cognizant currently has an Earnings ESP of -4.11% and a Zacks Rank #3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some companies worth considering, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

Airbnb ABNB has an Earnings ESP of +23.46% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Airbnb shares are up 34.8% year to date. ABNB is set to report its first-quarter 2023 results on May 9.

DoorDash DASH has an Earnings ESP of +8.93% and a Zacks Rank of 3, at present.

DoorDash shares have gained 19.7% year to date. DASH is set to report its first-quarter 2023 results on May 4.

Frontier Communications Parent FYBR has an Earnings ESP of +20% and a Zacks Rank #3.

Frontier shares are down 14.1% year to date. FYBR is set to report its first-quarter 2023 results on May 5.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Cognizant Technology Solutions Corporation (CTSH) : Free Stock Analysis Report

DoorDash, Inc. (DASH) : Free Stock Analysis Report

Airbnb, Inc. (ABNB) : Free Stock Analysis Report

Frontier Communications Parent, Inc. (FYBR) : Free Stock Analysis Report

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