Cognyte Software (CGNT) AI Stock Analysis

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Cognyte Software

(NASDAQ:CGNT)

57Neutral

Cognyte Software's overall stock score reflects a mixed financial performance with declining revenues and persistent net losses, offset by improved cash flow management. Strong guidance and positive earnings call sentiment support future growth prospects. However, the negative P/E ratio and lack of dividend yield pose valuation concerns. The technical analysis suggests moderate positive momentum, contributing to a balanced outlook.

Positive Factors

Financial Targets

Management discussed 3-Year Financial Targets, which embed a slight year-over-year acceleration to approximately 13% in FY27 and FY28.

Revenue Growth

Cognyte guided FY26 Revenue to grow 12% yr-yr to $392.0 Million, which exceeded the consensus estimate of $373.5 Million.

Negative Factors

Revenue Visibility

Cognyte's cRPO balance exiting FY25 provides 86% visibility into next 12 months' Revenue forecast - down from 89% last year and 94% the year before; and implying a larger 'go-get.'

US Market Challenges

Cognyte is earlier in its US growth initiative where current policy uncertainty remains top of mind for investors.

Cognyte Software (CGNT) vs. S&P 500 (SPY)

Market Cap

$626.74M

Dividend YieldN/A

Average Volume (3M)443.52K

Price to Earnings (P/E)―

Beta (1Y)0.93

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees1,613

SectorTechnology

Sector Strength40

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)-0.17

Shares Outstanding71,956,190

10 Day Avg. Volume816,457

30 Day Avg. Volume443,517

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.89

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$10.00

Price Target Upside14.29% Upside

Rating ConsensusHold

Number of Analyst Covering2

Cognyte Software Business Overview & Revenue Model

Company DescriptionCognyte Software Ltd. provides an investigative analytics software to governments and enterprises worldwide. Its Actionable Intelligence for a Safer World, an open software designed to help governments and enterprises accelerate and enhance the effectiveness of investigations. The company also offers network intelligence analytics, open source and threat intelligence analytics, and operational intelligence analytics solutions. Its solutions are designed to support various use cases and support a range of users, including data analysts, investigation managers, and security operations center operators, as well as operational field teams. In addition, the company provides customer support, professional, and integration services. Its government customers include national, regional, and local government agencies; and enterprise customers consist of commercial and physical security customers. The company was incorporated in 2020 and is headquartered in Herzliya, Israel.

How the Company Makes MoneyCognyte Software generates revenue primarily through the sale of its software solutions and related services. The company's revenue model includes licensing fees for its software products, which are often sold as part of multi-year contracts. Additionally, Cognyte earns money through maintenance and support services, providing ongoing updates and customer support to its clients. The company may also engage in strategic partnerships and collaborations with government agencies and corporations to expand its market reach and enhance its offerings. Revenue is further supplemented by professional services, which include consulting, training, and custom software development tailored to client-specific needs.

Cognyte Software Financial Statement Overview

Summary

Cognyte Software faces profitability challenges with negative net income and low net profit margins, despite a strong gross profit margin. The balance sheet is stable with low leverage, but negative returns to equity. Cash flow is a positive aspect, with robust operating and free cash flows.

Income Statement

Neutral

The income statement shows a declining trend in revenue with a negative net income for the TTM (Trailing-Twelve-Months). The gross profit margin stands at 68.8%, reflecting strong operational efficiency. However, the net profit margin is negative due to significant net losses, indicating profitability challenges. Revenue growth from the previous year is relatively flat, with only a slight increase.

Balance Sheet

Neutral

The company's balance sheet reflects moderate leverage with a debt-to-equity ratio of 0.15, indicating low reliance on debt. Return on equity is negative due to net losses, which affects shareholder returns. The equity ratio is 39.4%, showing a stable financial position with a reasonable proportion of equity financing.

Cash Flow

Neutral

Cash flow analysis reveals positive operating cash flows and improving free cash flow, with a free cash flow growth rate of 6.3%. The operating cash flow to net income ratio is robust, suggesting strong cash generation relative to net losses. However, the free cash flow to net income ratio is constrained by negative net income.

Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Breakdown
Income Statement		Total Revenue
350.63M	313.40M	312.06M	474.04M	443.46M
	Gross Profit
246.92M	215.40M	192.13M	341.64M	310.79M
	EBIT
-5.13M	-18.05M	-103.32M	8.46M	24.91M
	EBITDA
9.38M	573.00K	-77.35M	29.73M	47.43M
	Net Income Common Stockholders
-12.05M	-15.57M	-109.95M	-10.26M	20.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
112.72M	74.48M	52.09M	163.02M	83.28M
	Total Assets
497.82M	472.08M	443.08M	664.61M	628.82M
	Total Debt
35.53M	33.36M	16.97M	117.18M	24.14M
	Net Debt
-77.19M	-41.11M	-17.61M	-35.41M	-54.44M
	Total Liabilities
280.72M	257.35M	233.30M	365.52M	358.45M
	Stockholders Equity
198.19M	197.88M	194.13M	285.14M	257.50M
Cash Flow		Free Cash Flow
33.59M	25.49M	-48.67M	-15.16M	51.98M
	Operating Cash Flow
46.78M	34.56M	-36.99M	2.63M	71.31M
	Investing Cash Flow
-5.69M	9.36M	20.13M	-17.85M	16.42M
	Financing Cash Flow
-7.95M	-2.45M	-102.93M	58.74M	-205.62M

Cognyte Software Technical Analysis

Technical Analysis Sentiment

Positive

Last Price8.75

Price Trends

50DMA

9.11

Positive

100DMA

8.84

Positive

200DMA

7.99

Positive

Market Momentum

MACD

-0.28

Negative

RSI

43.21

Neutral

STOCH

32.79

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CGNT, the sentiment is Positive. The current price of 8.75 is above the 20-day moving average (MA) of 8.54, below the 50-day MA of 9.11, and above the 200-day MA of 7.99, indicating a bullish trend. The MACD of -0.28 indicates Negative momentum. The RSI at 43.21 is Neutral, neither overbought nor oversold. The STOCH value of 32.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CGNT.

Cognyte Software Risk Analysis

Cognyte Software disclosed 60 risk factors in its most recent earnings report. Cognyte Software reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Cognyte Software Peers Comparison

Overall Rating

UnderperformOutperform

Sector (57)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	73 Outperform	$4.27B	24.75	41.09%	―	10.40%	14.78%
DT	73 Outperform	$12.49B	25.88	21.59%	―	19.81%	139.58%
Sector *	57 Neutral	$20.31B	10.03	-14.49%	2.79%	5.15%	-23.76%
CGNT	57 Neutral	$626.74M	―	-6.09%	―	―	―
VRNS	57 Neutral	$4.28B	―	-20.26%	―	10.38%	6.88%
AI	54 Neutral	$2.54B	―	-32.07%	―	23.79%	4.10%
VERI	41 Neutral	$101.77M	―	-365.12%	―	-16.08%	-72.09%

* Technology Sector Average

Performance Comparison

CGNT

Cognyte Software

9.41

2.44

35.01%

QLYS

Qualys

125.73

-39.67

-23.98%

VRNS

Varonis Systems

41.35

-4.22

-9.26%

VERI

Veritone

2.27

-2.97

-56.68%

Dynatrace

45.06

-2.39

-5.04%

C3ai

21.18

-2.43

-10.29%

Cognyte Software Earnings Call Summary

Earnings Call Date: Apr 2, 2025 | % Change Since: 6.45% | Next Earnings Date: Jun 24, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong financial performance for Cognyte, with significant growth in revenue, profitability, and cash flow. The company successfully expanded its customer base and secured large deals, particularly in the U.S. market. However, challenges such as a modest decline in revenue from the Americas, a decrease in RPO, and extended sales cycles in the U.S. federal market present areas of concern. Overall, the positive aspects outweigh the lowlights.

Highlights

Double-Digit Revenue Growth

Cognyte achieved a 13% year-over-year revenue growth in Q4, reaching $94.5 million. For the full fiscal year, revenue grew by approximately 12% to $351 million.

Significant Profitability Increase

Non-GAAP gross profit increased by 17% year-over-year in Q4. Adjusted EBITDA for the quarter was more than $9 million, representing a 114% year-over-year growth.

Strong Cash Flow

Cash flow from operations was $19 million in Q4 and $47 million for the full fiscal year.

Expansion in Customer Base

Cognyte added over 60 new customers across multiple regions over the full year, about twice as many as the previous fiscal year.

Success in Securing Large Deals

In Q4, Cognyte secured multiple significant deals, including a $10 million deal with a law enforcement agency in EMEA and five deals worth $5 million or more.

U.S. Market Growth

Cognyte reported an increase in U.S. revenue and is actively pursuing opportunities in the U.S. federal law enforcement market.

Positive Fiscal 2026 Outlook

For fiscal 2026, Cognyte expects revenue to be approximately $392 million with a 12% year-over-year growth and adjusted EBITDA of about $43 million, representing 45% year-over-year growth.

Lowlights

Decline in Revenue from the Americas

Revenue from the Americas region declined modestly last year, although U.S. revenue increased.

RPO Decrease

Total remaining performance obligations (RPO) were down by about $45 million compared to last year.

Extended Sales Cycles in U.S. Federal Market

The sales cycle with U.S. federal law enforcement customers is longer than with state and local agencies.

Potential Challenges in Cash Flow

Although strong cash flow was reported, cash flow from operations is expected to decline slightly to $45 million in fiscal 2026.

Company Guidance

In the recent earnings call, Cognyte provided robust guidance for fiscal year 2026, projecting approximately $392 million in revenue, representing a 12% year-over-year growth at the midpoint. The company anticipates that gross profit will grow faster than revenue, with an expected adjusted EBITDA of about $43 million, indicating an approximate 45% increase year-over-year. This guidance is underpinned by strong market demand, especially in the U.S., where the company plans to deepen customer relationships and expand its footprint. Cognyte also highlighted the addition of over 60 new customers in the past year, reinforcing the significant market opportunity ahead. The company remains committed to leveraging its innovative solutions to drive long-term growth and profitability.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.