Cognizant Technology Solutions Corporation (CTSH) May Have Tough Resistance Ahead

Friedrich Matthew W. sold 2,893 shares in Cognizant Technology Solutions Corporation (NASDAQ:CTSH) in transaction occurred on 2018/12/04. After making this transaction, the General Counsel owns a direct stake of 203,899 shares. On 2018/12/04 Lennox James Patrick, EVP – Chief People Officer at CTSH, dumped 845 shares at an average price of $70.51 per share. The selling total is valued at $410,848.

Separately, it had been reported that some other CTSH insiders also took part of the insider trading activity. EVP, NA Regional Delivery Ctrs, Shaheen Allen had divested 1,232 shares through a trade on 2018/12/04. Following this activity, the insider holds 88,100 shares. Wall Street’s most bullish Cognizant Technology Solutions Corporation (NASDAQ:CTSH) analysts are predicting the share price to blow past $100 per share during the next 12 months. The current median share price forecast by them is $80, suggesting that the stock could increase 15.27% in that time frame. The average price target of $82.48 calls for a nearly 18.85% increase in the stock price.

Cognizant Technology Solutions Corporation (NASDAQ:CTSH) reaches $40.18B market cap as shares retreated -0.89% in recent session. It closed at $69.4, after slipping as low as $68.105 through the day. The shares were pushed to an intraday high Thursday at $69.48. Trading activity significantly improved as the volume at ready counter increased to 4,288,424 shares versus 3,763,605 in average daily trading volume over the past 20 days. So far this year, the volume has averaged about 3,525,781 shares. The stock is now 6.54% above against its bear-market low of $65.14 on October 30, 2018. It has retreated -22.62% since it’s 52-week high of $85.1 reached in March. Now the market price is down -1.46% on the year and down -2.28% YTD.

CTSH’s 50 day simple moving average (SMA 50) price is $71.55 and its 200-day simple moving average (SMA 200) price is $77.26. The company’s stock currently has a total float of 575.92M shares. Its weekly volatility is hovering around 1.96% and felt 2.11% volatility in price over a month. On the upside, the share price will test short term resistance at around $69.89. On a downside, the stock is likely to find some support, which begins at $68.51. The failure to get near-term support could push it to $67.62.

It had seen a positive analyst call from Goldman, which upgraded the stock from Neutral to Buy on November 26. Analysts at Jefferies, started covering the stock on November 20 with a Hold rating. Brokerage firm BofA/Merrill, looks cautious as they stick to prior recommendation of Underperform, in a call on November 02. However, they did change the target price from $81 to $68. MoffettNathanson, released new analyst coverage on October 04, calling the stock is Neutral.

When looking at valuations, Cognizant Technology Solutions Corporation (CTSH) has a cheap P/E of 19.89x as compared to industry average of 22.43x. Moreover, it trades for 13.82 times the next 12 months of expected earnings. Also, it is trading at rather expensive levels at just over 3.66x price/book and 2.54x price/sales. Compared to others, Cognizant Technology Solutions Corporation is in a different league with regards to profitability, having net margins of 9.1%. To put some perspective around this, the industry’s average net margin is 13.13%. CTSH’s ROE is 13.3%, which is also considerably worse than the industry’s ROE of 14.1%. It’s also very liquid in the near term, with a current ratio of 3.2. The stock has a debt/capital of 0.07.

Shares of Cognizant Technology Solutions Corporation (CTSH) have gained 1.2% since the company’s last earnings report. Over the past 12 fiscal quarters, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) has topped consensus earnings estimates in 11 quarters (91%), missed earnings in 1 quarters (8%), whereas at 0 occasion EPS met analyst expectations. CTSH last reported earnings on October 30, 2018 when it released Sep-18 results that exceeded expectations. The company raked in $1.19 per share, -76.1% change on the same period last year. That was better than consensus for $1.13. Revenue for the recent quarter stood at $4.08 billion, up 8% on last year and below the $4.08 billion predicted by analysts. For this quarter, Wall Street analysts forecast revenue in a range of $4.11 billion to $4.15 billion, which should be compared with $4.16 billion generated last year. EPS is seen in a range of $0.95 to $1.14, against the $1.14 reported a year ago.