TEANECK, N.J. - Cognizant Technology Solutions (NASDAQ:CTSH) Corporation (NASDAQ: CTSH), a provider of information technology, consulting, and business process services, has entered into a five-year strategic collaboration with Victory Capital Holdings, Inc. (NASDAQ: NASDAQ:VCTR), a global asset management firm.
This partnership, announced today, will see Cognizant delivering IT infrastructure, security, and data and analytics support to aid Victory Capital's ongoing digital transformation efforts.
The services Cognizant is set to provide include infrastructure management, security engineering, and a 24/7 security operations center. Additionally, a comprehensive service desk will be established to offer infrastructure and application monitoring and end-user support.
These initiatives are expected to enhance service management capabilities, improve service productivity, and generate cost savings for Victory Capital, while also enabling the firm to scale its operations efficiently.
Victory Capital has previously engaged Cognizant's services to design and transform its IT landscape, including the technology engineering and implementation for its new headquarters in San Antonio, Texas, in 2019.
Ian Sale, Chief Operating and Technology Officer of Victory Capital, expressed confidence in the strategic relationship, citing Cognizant's track record of providing technology solutions that have supported the firm's growth in a dynamic market.
Nageswar Cherukupalli, Senior Vice President & Business Unit Head of Banking & Capital Markets and Strategic Initiatives at Cognizant, emphasized the company's commitment to leveraging its expertise and global delivery network to assist Victory Capital in serving its clients.
Victory Capital, headquartered in San Antonio, Texas, manages $173.8 billion in client assets as of June 30, 2024. The company offers a range of specialized investment strategies to various clients, including institutions, intermediaries, and individual investors.
This collaboration is part of Cognizant's broader mission to help clients modernize technology, reimagine processes, and transform experiences to stay competitive in a rapidly evolving digital landscape.
In other recent news, Cognizant Technology Solutions reported Q1 2024 earnings showing a slight revenue decline to $4.8 billion, but an improved adjusted operating margin of 15.1%. The company also announced the appointment of Karima Silvent as a new independent director to its Board, expanding it to 13 directors.
In terms of acquisitions, Cognizant has agreed to acquire Belcan, LLC, an engineering research and development services provider, for approximately $1.3 billion, a move expected to contribute over $800 million in annualized revenue.
On the legal front, Cognizant settled a lawsuit involving its CFO, Jatin Dalal, and his former employer, Wipro (NYSE:WIT) Limited, with a payment of $505,087. This allows the company and Mr. Dalal to move forward without the overhang of litigation.
In partnership news, Cognizant expanded its collaboration with Cengage Group and launched a new suite of healthcare solutions developed using Google (NASDAQ:GOOGL) Cloud's generative AI technology. These efforts underscore the company's continued commitment to innovation and growth.
Analysts have provided mixed reviews with Goldman Sachs (NYSE:GS) initiating coverage on Cognizant with a neutral rating, BofA Securities maintaining an underperform rating, and BMO Capital Markets slightly raising its price target for the company, maintaining a market perform rating.
InvestingPro Insights
In light of Cognizant Technology Solutions Corporation's (NASDAQ: CTSH) new strategic collaboration with Victory Capital Holdings, Inc., it's essential to consider the company's financial health and market performance. Cognizant's commitment to innovation and support in digital transformation initiatives is underscored by its market capitalization of $36.69 billion and a solid P/E ratio of 17.71, which adjusts to an even more attractive 16.08 when we look at the last twelve months as of Q1 2024.
Investors looking to gauge the company's stock market momentum can note the significant return over the last month, with a 12.62% increase in price total return. This is complemented by an 8.79% return over the last week, illustrating a strong short-term performance trend. These figures are particularly relevant for investors considering the timing of their investments in relation to Cognizant's recent business developments.
Adding to the company's appeal is its consistent dividend growth, with dividends raised for 4 consecutive years, reflecting a dividend yield of 1.63%. This demonstrates Cognizant's ability to generate stable returns for shareholders, a noteworthy point for those interested in income-generating investments. For more insights, there are additional InvestingPro Tips available, including the fact that Cognizant operates with a moderate level of debt and that its liquid assets exceed short-term obligations, providing a picture of financial stability. To explore these and other expert analyses, visit InvestingPro and consider using the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
With a total of 11 InvestingPro Tips available, investors can delve deeper into Cognizant's financials and market position to make informed decisions. The tips offer a comprehensive view of the company's performance, including its status as a prominent player in the IT Services industry and its strong cash flows, which can sufficiently cover interest payments.
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