Cognizant Earnings: Digital Transformation Demand Drives Guidance Raise; Fair Value Remains at $84

Narrow-moat Cognizant delivered strong first-quarter results, exceeding both our estimates and consensus expectations on revenue and profitability. This better-than-expected performance was driven by resilient demand for digital transformation and cost-reduction initiatives across key verticals, which helped offset late-quarter headwinds from discretionary spending constraints. Management provided solid second-quarter guidance, forecasting revenue growth of 5.9% to 7.4% year on year. More notably, full-year guidance was raised: revenue is now expected to grow 3.9% to 6.4% year on year, up from the prior range of 2.6% to 5.1%. Adjusted earnings per share is projected to be between $4.98 and $5.14 (previously $4.90 to $5.06). Adjusted operating margin guidance is unchanged at 15.5%-15.7%.