Cognizant Technology Solutions (NASDAQ:CTSH) to Buyback $2.00 billion in Shares

Cognizant Technology Solutions (NASDAQ:CTSH) announced that its Board of Directors has authorized a share repurchase plan on Tuesday, March 25th, RTT News reports. The company plans to repurchase $2.00 billion in outstanding shares. This repurchase authorization authorizes the information technology service provider to repurchase up to 5.1% of its shares through open market purchases. Shares repurchase plans are usually a sign that the company’s board of directors believes its stock is undervalued.

Cognizant Technology Solutions Stock Up 1.1 %

Shares of CTSH traded up $0.88 during mid-day trading on Tuesday, reaching $78.82. 5,214,872 shares of the stock traded hands, compared to its average volume of 3,380,801. The firm has a market cap of $38.99 billion, a price-to-earnings ratio of 17.48, a P/E/G ratio of 2.11 and a beta of 1.12. The company has a quick ratio of 2.09, a current ratio of 2.09 and a debt-to-equity ratio of 0.06. The stock has a fifty day simple moving average of $82.72 and a 200 day simple moving average of $79.50. Cognizant Technology Solutions has a 12-month low of $63.79 and a 12-month high of $90.82.

Cognizant Technology Solutions (NASDAQ:CTSH) last released its earnings results on Wednesday, February 5th. The information technology service provider reported $1.21 EPS for the quarter, topping analysts’ consensus estimates of $1.12 by $0.09. Cognizant Technology Solutions had a return on equity of 16.78% and a net margin of 11.35%. Sell-side analysts expect that Cognizant Technology Solutions will post 4.98 EPS for the current fiscal year.

Cognizant Technology Solutions Increases Dividend

The firm also recently announced a quarterly dividend, which was paid on Wednesday, February 26th. Shareholders of record on Tuesday, February 18th were paid a dividend of $0.31 per share. The ex-dividend date was Tuesday, February 18th. This represents a $1.24 annualized dividend and a yield of 1.57%. This is an increase from Cognizant Technology Solutions’s previous quarterly dividend of $0.30. Cognizant Technology Solutions’s payout ratio is presently 27.49%.

Wall Street Analyst Weigh In

Several research firms have recently commented on CTSH. UBS Group decreased their price objective on Cognizant Technology Solutions from $93.00 to $88.00 and set a “neutral” rating on the stock in a report on Monday, March 17th. Needham & Company LLC reissued a “hold” rating on shares of Cognizant Technology Solutions in a research note on Thursday, February 6th. Royal Bank of Canada increased their price objective on shares of Cognizant Technology Solutions from $82.00 to $93.00 and gave the company a “sector perform” rating in a research report on Thursday, February 6th. Morgan Stanley reduced their price target on shares of Cognizant Technology Solutions from $85.00 to $80.00 and set an “equal weight” rating for the company in a research note on Wednesday, March 12th. Finally, StockNews.com upgraded shares of Cognizant Technology Solutions from a “hold” rating to a “buy” rating in a research report on Thursday, February 6th. Fifteen research analysts have rated the stock with a hold rating and five have given a buy rating to the company’s stock. According to MarketBeat, the company presently has an average rating of “Hold” and an average price target of $83.71.

About Cognizant Technology Solutions

Cognizant Technology Solutions Corporation, a professional services company, provides consulting and technology, and outsourcing services in North America, Europe, and internationally. It operates through four segments: Financial Services, Health Sciences, Products and Resources, and Communications, Media and Technology.