The Meltdown in Cognizant

Shares of Cognizant Technology Solutions ($CTSH) have dropped sharply over the past few weeks. The stock closed at $77.66 on April 11th, and including today, it’s dropped for nine days in a row. Today’s low was $61.80.

So what’s going on? The company doesn’t report Q1 earnings until May 8th. The problem is that Infosys ($INFY), a similar company, recently gave terrible guidance, so traders are convinced CTSH will do the same. The earnings miss from IBM ($IBM) also dinged the sector.

There are also concerns that, in light of recent events, upcoming legislation may impact the status of foreign workers. I really can’t weigh any of these events at the moment because they don’t impact the company directly but are instead tangential concerns. I don’t mean to downplay them, but we can’t say yet if they will impact CTSH’s first-quarter results.

Posted by on April 24th, 2013 at 3:50 pm


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