Investors in Cognizant Technology Solutions Corporation (NASDAQ:CTSH) had a good week, as its shares rose 7.7% to close at US$77.70 following the release of its quarterly results. It looks like a credible result overall - although revenues of US$5.1b were in line with what the analysts predicted, Cognizant Technology Solutions surprised by delivering a statutory profit of US$1.34 per share, a notable 13% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.NasdaqGS:CTSH Earnings and Revenue Growth May 3rd 2025

Following the latest results, Cognizant Technology Solutions' 25 analysts are now forecasting revenues of US$20.8b in 2025. This would be a modest 3.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 7.9% to US$5.16. Before this earnings report, the analysts had been forecasting revenues of US$20.5b and earnings per share (EPS) of US$5.01 in 2025. So the consensus seems to have become somewhat more optimistic on Cognizant Technology Solutions' earnings potential following these results.

See our latest analysis for Cognizant Technology Solutions

The consensus price target was unchanged at US$86.55, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Cognizant Technology Solutions at US$103 per share, while the most bearish prices it at US$76.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Cognizant Technology Solutions' past performance and to peers in the same industry. It's clear from the latest estimates that Cognizant Technology Solutions' rate of growth is expected to accelerate meaningfully, with the forecast 4.7% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 3.7% p.a. over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 9.7% per year. It seems obvious that, while the future growth outlook is brighter than the recent past, Cognizant Technology Solutions is expected to grow slower than the wider industry.

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The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Cognizant Technology Solutions' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Cognizant Technology Solutions' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$86.55, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Cognizant Technology Solutions. Long-term earnings power is much more important than next year's profits. We have forecasts for Cognizant Technology Solutions going out to 2027, and you can see them free on our platform here.

We also provide an overview of the Cognizant Technology Solutions Board and CEO remuneration and length of tenure at the company, and whether insiders have been buying the stock,  here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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