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Cognizant Know-how (NASDAQ:CTSH) shares fell greater than 10% in premarket buying and selling on Thursday because the IT providers firm reported third-quarter outcomes that missed Wall Road expectations and supplied steerage that prompted downgrades from a number of Wall Road banks.
William Blair analyst Maggie Nolan lowered the agency’s score on Cognizant Know-how (CTSH) to market carry out from outperform, noting that the third-quarter outcomes “highlighted” the place the corporate has continued to fall brief in its execution section after a number of years of turmoil and transformation.
“The tight expertise market and attrition have been the principle dangers to the corporate’s potential to capitalize on latest investments, and within the third quarter the mismanagement of expertise got here to a head,” Nolan wrote in a notice to purchasers.
“We not believe that the corporate will speed up top-line development within the subsequent 12 months because the churn within the worker base is more likely to proceed plaguing the corporate in 2023.”
BMO Capital analyst Keith Bachman lowered his score on Cognizant Know-how (CTSH) to market carry out from outperform and reduce the worth goal to $65 from $73, noting that 2023 is more likely to be a “difficult yr” for IT providers and achievement coming off an uneven 2022.
“Whereas the inventory is cheap, we don’t envision a near-term catalyst,” Bachman wrote.
Earlier this month, Cognizant (CTSH) stated it agreed to purchase OneSource Digital, a Workday accomplice based mostly in Dallas, Texas.
Analysts are largely cautious on Cognizant (CTSH). It has a BUY score from In search of Alpha authors, whereas Wall Road analysts price it a HOLD. Conversely, In search of Alpha’s quant system, which persistently beats the market, charges CTSH a HOLD.
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