Cognizant Technology Solutions Corp. (CTSH)) shares are setting a new 52-week high after the most recent earnings surprise.
Company Description
Cognizant provides software development and maintenance for companies transitioning into e-business. The company utilizes both on-site consultants and outsourced project members.
Blows Away Analysts
On Aug 4 Cognizant reported second-quarter results that included a 13% revenue growth. The company brought in $777 million. Coupled with an operating margin of 20.8%, above the company’s target, Cognizant earned just over $141 million.
Earnings were 36% higher, year-over-year, and yielded EPS of 47 cents. This was 12 cents higher than last year and beat the Zacks consensus estimate by a dime.
A Flurry of Estimates
In the past month there have been 29 upward revisions amongst just 18 analysts polled by Zacks. The average estimate is now $1.65 for 2009, up from $1.54. The Zacks consensus for 2010 is up to $1.80, from $1.68 in that time frame.
These levels would mean a 14% annual earnings growth rate for this year and another 10% in 2010.
Industry Leader
Cognizant is the top rated software company using the Zacks Rank. When looking at the comparisons to its peers it is easy to see why. The company’s ROE is almost 24% compared to the 9% industry average.
Additionally, Cognizant’s net profit margin of 16% is 3 times higher than the average of its peers.
The Chart
The most recent report was enough to send shares higher, setting a new 52-week high. Take a look below.
