Cognizant Earnings: Delayed Decision-Making Persists, but Bookings Strong; Shares Are a Solid Buy

Cognizant posted solid results for the first quarter of the year, surpassing our top- and bottom-line expectations. Guidance for the year was a more mixed story. While we thought revenue was underwhelming, profitability appears to be better than we were bracing for. Accounting for the blended guide, we are maintaining our fair value estimate of $91 per share as we believe that there is no reason for Cognizant not to benefit from long-term digital transformation trends to a similar degree as its peers. Shares are up 5% upon results, but the stock still has a long way to go to reach our fair value estimate, in our view, leaving plenty of opportunity for investors to invest in this narrow-moat stock.