2 Beaten-Down Growth Stocks to Scoop Up Right Now

NASDAQ: CTSH | Cognizant Technology Solutions Corp. News, Ratings, and Charts

CTSH – Growth stocks are grabbing investors’ attention due to continuing economic growth thanks to fiscal and monetary stimulus. And because the market remains highly volatile now on concerns over the resurgence of COVID-19 cases, we think it could be wise to take advantage of the price dips in Cognizant (CTSH) and Incyte (INCY), which both possess solid growth attributes.

The first quarter of 2021 marked the fastest economic growth in decades, which drove increased consumer spending. And the stock market has remained bullish despite analysts’ projections of a correction.

The U.S.’ real gross domestic product (GDP) increased at a 6.5% annual rate in the second quarter of 2021, indicating a continuing economic recovery. In addition, government stimulus, including tax credits and loans to businesses and the Fed’s accommodative monetary policy, are buoying investor optimism about corporate performance and earnings. As a result, the economy is expected to continue growing in the second half of 2021.

Growth stocks with stable financials are expected to benefit significantly from the economic growth. However, market volatility, triggered primarily by the resurgence of COVID-19 cases, has lately caused a price dip in quality growth stocks Cognizant Technology Solutions Corporation (CTSH) and Incyte Corporation (INCY). So, we think it could be wise to bet on them right now.

Cognizant Technology Solutions Corporation (CTSH)

CTSH in Teaneck, N.J. is a professional services company that provides consulting and technology and outsourcing services in North America, Europe, and internationally. The company operates through four segments: Financial Services; Healthcare; Products and Resources; and Communications, Media, and Technology.

On July 20, CTSH agreed to acquire TQS Integration, a privately owned global industrial data and intelligence company based in Lismore, Ireland. The acquisition should enhance the company’s end-to-end smart factory capabilities and improve client experience.

CTSH’s revenues improved at a 3.9% CAGR over the past three years, while its net income increased at a 5% CAGR over this period. In addition, the company’s EPS improved at an 8.4% CAGR over the past three years.

CTSH’s revenues increased 14.6% year-over-year to $4.59 billion in its fiscal second quarter, ended June 30. Its income from operations grew 49% from its  year-ago value to $696 million, while its net income improved 41.8% year-over-year to $512 million. The company’s EPS increased 44.8% year-over-year to $0.97.

Analysts expect CTSH’s revenues to increase 11.2% year-over-year to $4.72 billion in the current quarter, ending September 2021. A $1.05  consensus EPS estimate for the current quarter indicates an 8.5% rise from the same period last year. CTSH has an impressive earnings surprise history also; it beat the consensus EPS estimates in three  of the trailing four quarters.

Over the past five days, CTSH declined  marginally to close yesterday’s trading session at $73.00. The stock has gained 6.2% over the past month. Its median price target of $82.83 represents a potential 13.8% upside from its last closing price.

It is no surprise that CTSH has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated considering 118 distinct factors, with each factor weighted to an optimal degree.

The stock also has a B grade for Momentum and Quality. Among the 13 stocks in the A-rated Outsourcing – Tech Services industry, CTSH is ranked #3.

To see additional CTSH ratings for Growth, Sentiment, Stability, and Value, click here.

Incyte Corporation (INCY)

INCY is a biopharmaceutical company that is focused on the discovery, development, and commercialization of proprietary therapeutics globally. INCY is based in Wilmington, Del.

On August 3, INCY and Eli Lilly and Company (LLY) shared new data from the Phase 3 COV-BARRIER sub-study indicating effectiveness and reduced deaths among patients with COVID-19. If it receives the final authorization, the company is likely to garner substantial revenues, given the resurgence of the COVID-19 cases.

INCY’s revenues have increased at a 16.3% CAGR over the past three years, while its total assets grew at a 17.7% CAGR over the period. Furthermore, its tangible book value has improved at a 24.7% CAGR over the past three years.

INCY’s total revenues increased 3% year-over-year to $705.71 million in its  fiscal second quarter, ended June 30. Its product and royalty revenues stood at $695.71 million, up 17% from the same period last year. Its cash and cash equivalents balance rose 35.4% year-over-year to $1.80 billion in the six months ended June 30.

A $739.01 million consensus revenue estimate for the fiscal third quarter (ending September 2021) indicates a 19.1% increase year-over-year. The Street expects the company’s EPS to rise 215.2% from the prior year quarter to $0.72 in the current quarter. In addition, INCY surpassed Street’s EPS estimates in three  of the trailing four quarters.

INCY lost 8.5% over the past month to close yesterday’s trading session at $76.30. The stock has declined 1.4% over the past five days. Its $92.86 median price target indicates a potential 21.5% upside from its last closing price.

INCY has an overall B rating, which equates to Buy in our proprietary POWR Ratings system. In addition, INCY has an A  grade for Quality, and a B for Value. It is ranked #9 among the 505 stocks in the Biotech industry.

Click here to view additional INCY ratings for Growth, Momentum, Sentiment, and Stability.

Click here to checkout our Healthcare Sector Report for 2021


CTSH shares were trading at $72.61 per share on Monday afternoon, down $0.39 (-0.53%). Year-to-date, CTSH has declined -10.82%, versus a 19.13% rise in the benchmark S&P 500 index during the same period.


About the Author: Subhasree Kar


Subhasree’s keen interest in financial instruments led her to pursue a career as an investment analyst. After earning a Master’s degree in Economics, she gained knowledge of equity research and portfolio management at Finlatics. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
CTSHGet RatingGet RatingGet Rating
INCYGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Inflation Not Fading Fast Enough for Stock Investors

Investors may have celebrated the end of high inflation too soon. The CPI report shows inflation bouncing higher and thus pushing back the start date for Fed rate cuts. This has the S&P 500 (SPY) coming off recent highs. This begs questions like how much more downside could we see? And when will the bull market get back on track? 44 year investment veteran Steve Reitmeister shares his answers to these questions in this timely commentary including a preview of his top picks to stay ahead of the pack. Read on below for more...

3 Auto Stocks to Consider Over TSLA in April

Tesla (TSLA) reported a decline in deliveries in the first quarter, and Wall Street expects the company to deliver fewer vehicles than last year. Furthermore, rising competition, slowing EV sales, and stretched valuation make TSLA unattractive from an investment standpoint. Considering these factors, investors could consider buying fundamentally strong auto stocks Blue Bird (BLBD), Rolls-Royce Holdings (RYCEY), and Stellantis (STLA) over Tesla (TSLA). Read more...

3 Top-Rated Tech Stock Buys for Value in April

The technology sector is undergoing a notable surge, propelled by increasing digitalization endeavors among businesses and governmental support for technological progress. So, fundamentally sound tech stocks Box Inc. (BOX), Teradata (TDC), and Materialise (MTLS), which seem pretty undervalued, might be ideal buys this month. Continue reading...

Top Software Stocks at the Forefront of Market Gains

The software industry's prospects appear bright due to increasing investments in digital transformation, high demand for advanced software services from various sectors, and the integration of emerging technologies such as generative AI. Therefore, investors could consider buying quality software stocks Autodesk (ADSK), DocuSign (DOCU), and Pegasystems (PEGA) for solid gains. Read more...

Updated 2024 Stock Market Outlook

The bull market continues to rage on with the S&P 500 (SPY) making new highs. That is the past...the question is what does the future hold? That is why 44 year investment veteran Steve Reitmeister provides this updated 2024 Stock Market Outlook to help you carve a path to outperformance the rest of the year. Read on below for the full story...

Read More Stories

More Cognizant Technology Solutions Corp. (CTSH) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All CTSH News