Shares of Cognizant Technology Solutions Corp. fell sharply Wednesday after the information technology company projected second-quarter profit below analyst estimates.
The stock dropped $3.54, or 10.5 percent, to $30.21. It has ranged between $23.37 and $44.44 over the past year.
Early Wednesday, Cognizant reported first-quarter profit rose 35 percent to 38 cents per share, well above the 33 cents per share predicted by analysts polled by Thomson Financial.
However, Cognizant's second-quarter forecast for profit of 34 cents to 35 cents per share was below the 36 cents per share projected by analysts.
Citi analyst Ashwin Shirvaikar maintained his "Buy" rating on Cognizant, but removed the company from his "Global Tech Conviction List."
He said that although the company's full-year revenue growth outlook is far above the expectations of most investors, the second-quarter guidance could pressure the stock and lead investors to question the full-year outlook.
"We expect the stock will be weak today but it should form a bottom in the $28 to $30 range in the coming days ... This is purely a valuation-driven bottom as buy-side investor expectations stabilize and actually move up from current levels," he wrote in a Wednesday note to investors.
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