On Thursday, Cognizant Technology Solutions Corporation (NASDAQ:CTSH) shares fell despite announcing better-than-expected fiscal third-quarter results. The company reported its most recent quarterly revenue and earnings Wednesday after markets closed, beating the consensus for Street expectations. Cognizant also issued FY2021 revenue guidance ahead of the average for analyst forecasts.
The company posted FQ3 non-GAAP earnings per share of $1.06, beating the analyst estimate of $1.05. However, its GAAP EPS of $1.03, failed to match the expectation of $1.05, while revenue for the quarter grew by 10.8% from the same quarter a year ago to $4.74 billion, $10 million ahead of estimates.
Time to bet on Cognizant?
From an investment perspective, Cognizant shares trade at an attractive forward P/E ratio of about 17.13, making the stock a compelling option for value investors.
In addition, although analysts expect its earnings per share to fall by nearly 22% this year, they also forecast annual growth of about 12% for the next five years.
As a result, long-term growth investors could also find it as an exciting option for their portfolios.
Moreover, the CTSH stock has swung to a net year-to-date decline of about 2.13%, creating a perfect entry opportunity for buyers.
Source – TradingView
Technically, Cognizant shares seem to be trading within an ascending channel formation in the intraday chart. However, the stock has pulled back recently rejecting a retest of the trendline resistance.
Nonetheless, it still remains far from reaching oversold conditions of the 14-day RSI, leaving room for more downward movement.
Therefore, investors could target extended declines at about $75.37, or lower at $72.85, while $79.69 and $81.93, are crucial resistance zones.
Buy CTSH at the support?
In summary, Cognizant shares seem to have recently pulled back after rejecting a retest of current resistance levels.
However, although the stock appears attractively valued, it may be best to target a retest of the current support levels before betting on its exciting outlook.
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