Summary
Cognizant has created value through accretive acquisitions that have generated sustained long-term growth.
Cognizant customers are reluctant to change providers due to the company's commitment to understanding their business systems.
However, the company is under constant pressure to increase salaries to control the retention rate of its workforce.
After quarterly revenues came in below expectations, and a weak forecast for the next, Cognizant (CTSH) has suffered a correction in the price of its shares of almost 8%.
Executives attribute this result to the banking sector, which had a mixed growth rate on the part of large financial institutions, mainly large European banks. This resulted in its most important sector, financial services, growing 3% compared to 7% estimated by analysts.
Although Cognizant still maintains its historical growth, it seems that the services of cloud computing and analytics are decreasing their profit margins as customers demand more work for less money.
