CTSH - Cognizant: Positioning To Leverage Gen AI As The Technology Disrupts
2024-06-26 08:30:48 ET
Summary
- Cognizant is down by more than 20% since March 2022 as its revenues declined.
- This thesis aims to show that through an acquisition and Gen-AI-related opportunities, growth should be back in FY-2024.
- However, as a disruptive technology, Gen AI also comes with risks for Cognizant as a provider of IT outsourcing services.
- I have a modest upside target but one which could benefit from upwards growth estimates as analysts factor in the Belcan acquisition for FY-2024.
- Cost savings and improved utilization of its 354K-strong workforce are other positives while growth numbers for 2024 are based on deals rather than backlog as was the case before.
Cognizant Technology Solutions Corporation (CTSH) is an IT services provider whose shares are down by 21% since March 2022, in contrast to my bullish thesis at that time. The shares did go up momentarily but then suffered a long slide mostly because quarterly revenues trended lower as charted below....
Cognizant: Positioning To Leverage Gen AI As The Technology Disrupts