Cognizant Technology Solutions Corp (NASDAQ:CTSH) investors are running to the hills today following the announcement that current President Gordon Coburn has resigned and Rajeev Mehta will assume his role. On the negative side, investors think the change may suggest downside to either Sept or Dec Q consensus estimates. In addition, the company announced it has launched an internal investigation regarding payments associated with India (Real Estate).
Cognizant shares reacted to the news, falling nearly 12% in pre-market trading Friday.
Raj is a proven leader with strong client relationships forged over 20 years with the Company,” said Francisco D’Souza, Chief Executive Officer. “For the past decade Raj has been responsible for leading our market-facing teams in delivering industry-leading growth. He has a deep understanding of new technologies and new delivery models, and their potential to fundamentally transform businesses. I look forward to continuing to work closely with Raj in the coming years as we execute on our Cognizant 2020 strategy focused on helping our clients become digital enterprises.”
“I am honored to assume this new role at an exciting time in Cognizant’s history,” said Raj Mehta. “Over the past year, we have designed and introduced a new operating model to support our strategic vision and growth. I look forward to working with our clients, our associates, and our business partners to take the company to the next level.”
As Chief Executive Officer, IT Services at Cognizant, Raj was responsible for market-facing activities across the company as well as for delivery across Cognizant’s IT Services business. His prior roles at Cognizant include Group Chief Executive, Industries & Markets, where he was responsible for leading our industry vertical and geographic market operations on a global basis, and Chief Operating Officer, Global Client Services, where he was responsible for our sales, business development and client relationship management organizations. Raj earned his Bachelor’s degree from the University of Maryland and his MBA from Carnegie Mellon University. (Original Source)
On the ratings front, Cognizant has been the subject of a number of recent research reports. In a report issued on September 15, Goldman Sachs analyst James Schneider downgraded CTSH to Hold, with a price target of $61, which represents a potential upside of 11% from where the stock is currently trading. Separately, on September 14, CLSA’s Louis Miscioscia downgraded the stock to Sell and has a price target of $60.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, James Schneider and Louis Miscioscia have a total average return of 11.5% and 1.1% respectively. Schneider has a success rate of 69% and is ranked #466 out of 4200 analysts, while Miscioscia has a success rate of 46% and is ranked #2218.
Overall, one research analyst has rated the stock with a Sell rating, 4 research analysts have assigned a Hold rating and 11 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $66.11 which is 20.2% above where the stock closed yesterday.
Cognizant Technology Solutions Corp. provides information technology, consulting and business process outsourcing services. Its core competencies include Business, Process, Operations and IT Consulting, Application Development and Systems Integration, Enterprise Information Management, Application Testing, Application Maintenance, IT Infrastructure Services and Business Process Services The company operates its business through four segments: Financial Services, Healthcare, Manufacturing, Retail and Logistics and Other. The Financial Services segment includes customers providing banking/transaction processing, capital markets and insurance services. The Healthcare segment includes healthcare providers and payers as well as life sciences customers. The Manufacturing, Retail and Logistics segment includes manufacturers, retailers, travel and other hospitality customers, as well as customers providing logistics services. The Other segment is an aggregation of industry segments which includes entertainment, media and information services, communications and high technology operating segments.