Ctsh stock price forecast analysts project a potential breakout

Analysts project a potential breakout toward the $70 resistance level if sector tailwinds persist. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Management provided solid second-quarter guidance, forecasting year-over-year revenue growth of 5.9%-7.4%. More notably, full-year guidance was raised. Revenue is now expected to grow 3.9%-6.4% year on year, up from the prior range of 2.6%-5.1%. Adjusted earnings per share is projected to be $4.98-$5.14 (previously $4.90-$5.06). Adjusted operating margin guidance is unchanged at 15.5%-15.7%. CTSH stock price forecast benefits from the recent U.S. dollar softening, which could improve offshore revenue conversion rates, feeding into EPS growth estimates for the next two earnings cycles.