Cognyte Software (CGNT) AI Stock Analysis

Compare

261 Followers

Top Page

Cognyte Software

(NASDAQ:CGNT)

Rating:52Neutral

Price Target:

$8.50

▼(-1.73% Downside)

Cognyte Software's overall stock score is primarily influenced by its financial performance challenges, including declining revenues and persistent losses. The positive earnings call, highlighting revenue growth and strategic acquisitions, provides some optimism. However, technical indicators and valuation metrics suggest caution, as the stock is trading in a bearish trend with a negative P/E ratio.

Positive Factors

Acquisition

The acquisition of GroupSense is expected to accelerate Cognyte's growth in the U.S. market.

Financial Performance

Cognyte reported a clean beat in 1QFY26, with results exceeding consensus expectations.

Product Innovations

Product innovations like LUMINAR Threat Intelligence and NEXYTE Decision Intelligence are expected to have the biggest near-term impact on results.

Negative Factors

Market Expectations

The decline in the share price reflects elevated expectations where the stock was up 27% year-to-date into the print.

Recurring Revenue

Recurring Revenue as a percent of Total Revenue has steadily declined since 1QFY25.

Revenue Mix

Revenue mix has been choppy.

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

Market Cap

$642.57M

Dividend YieldN/A

Average Volume (3M)187.67K

Price to Earnings (P/E)―

Beta (1Y)0.72

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees1,623

SectorTechnology

Sector Strength86

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.07

Shares Outstanding71,956,190

10 Day Avg. Volume185,060

30 Day Avg. Volume187,673

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)0.00

Price to Sales (P/S)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap1.02

Enterprise Value/Revenue1.87

Enterprise Value/Gross Profit2.70

Enterprise Value/Ebitda70.02

Forecast

1Y Price Target

$10.00

Price Target Upside15.61% 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 licenses, subscription services, and maintenance agreements. The company operates a SaaS model that allows clients to access its analytics platform on a subscription basis, providing a steady stream of recurring revenue. Additionally, Cognyte earns income from professional services, including training, implementation, and support, which are essential for helping clients effectively utilize their software solutions. Strategic partnerships with government agencies and private sector organizations also play a crucial role in driving revenue, as they often result in long-term contracts and collaborative projects that enhance the company's market presence and credibility.

Cognyte Software Earnings Call Summary

Earnings Call Date:Jun 11, 2025

(Q1-2026)

% Change Since: |

Next Earnings Date:Sep 09, 2025

Earnings Call Sentiment Positive

The earnings call reflects a strong start to the fiscal year with significant revenue growth, major customer wins, and successful strategic acquisitions. Despite some challenges with cash flow and deferred revenue, the overall business outlook remains positive with a focus on innovation and expansion in the U.S. market.

Q1-2026 Updates

Positive Updates

Strong Revenue Growth

Revenue grew by approximately 16% year-over-year to $95.5 million in the first quarter.

Increased Gross Profit and Adjusted EBITDA

Non-GAAP gross profit increased by about 17% year-over-year, and adjusted EBITDA for the quarter was approximately $10 million, more than double the previous year's Q1.

Major Customer Wins

Signed a multi-year support agreement valued at over $20 million per year and a new 3-year subscription agreement valued at over $10 million per year.

Successful Acquisition

Acquired GroupSense, adding approximately 50 U.S.-based customers and expanding presence in the U.S. market.

Positive Customer Engagement

Strong customer engagement and participation at ISS World Prague, showcasing new AI-powered capabilities.

Negative Updates

Modest Cash Flow

Generated $1.7 million in cash flow from operations and a negative free cash flow of $2.5 million in Q1.

Deferred Revenue Decrease

Short- and long-term contract liabilities, or deferred revenue, were down modestly versus last year's balance.

Company Guidance

In the first quarter of fiscal year 2026, Cognyte reported a strong performance with revenue growth of approximately 16% year-over-year to $95.5 million and a non-GAAP gross profit increase of about 17% year-over-year. The company generated approximately $10 million in adjusted EBITDA, more than doubling its figure from the same quarter last year, and reported a cash flow from operations of $1.7 million. The guidance for fiscal 2026 was updated to reflect the recent acquisition of GroupSense, with expected revenue of approximately $395 million, representing about 13% year-over-year growth at the midpoint of the range, and an adjusted EBITDA of approximately $44 million, indicating a 50% year-over-year growth. The acquisition added approximately 50 new customers, primarily in the U.S., and is expected to bolster Cognyte's presence in the market.

Cognyte Software Financial Statement Overview

Summary

Cognyte Software is grappling with declining revenues and persistent net losses, despite improvements in gross profit margin and cash flow. The balance sheet shows stable debt levels but diminishing equity, indicating financial challenges, although cash flows are improving.

Income Statement

Neutral

Cognyte Software's revenue has shown a declining trend from $457M in 2020 to $350M in 2025, indicating a contraction in sales. The gross profit margin improved to 70.4% in 2025 from 62.2% in 2020, suggesting better cost management. However, the company has consistently incurred net losses, with a net profit margin of -3.4% in 2025. The EBIT margin has also been negative, indicating operational challenges.

Balance Sheet

Neutral

The debt-to-equity ratio remains low at 0.18 in 2025, indicating manageable debt levels. Stockholders' equity has decreased from $444M in 2020 to $198M in 2025, reflecting potential erosion of shareholder value. The equity ratio stands at 39.8% in 2025, highlighting a moderate level of financial stability.

Cash Flow

Neutral

Operating cash flow improved significantly to $47M in 2025 from negative $36M in 2023, showcasing better cash management. Free cash flow has turned positive, reaching $33M in 2025. The operating cash flow to net income ratio is favorable, indicating strong cash flow generation relative to net losses.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
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
EBITDA	9.38M	573.00K	-77.35M	29.73M	47.43M
Net Income	-12.05M	-15.57M	-114.13M	-14.89M	14.20M
Balance Sheet
Total Assets	497.82M	472.08M	443.08M	664.61M	628.82M
Cash, Cash Equivalents and Short-Term Investments	112.72M	74.48M	52.09M	163.02M	83.28M
Total Debt	35.53M	33.36M	16.97M	117.18M	24.14M
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

Negative

Last Price8.65

Price Trends

50DMA

9.01

Negative

100DMA

9.50

Negative

200DMA

9.17

Negative

Market Momentum

MACD

-0.09

Negative

RSI

43.68

Neutral

STOCH

66.83

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CGNT, the sentiment is Negative. The current price of 8.65 is below the 20-day moving average (MA) of 8.77, below the 50-day MA of 9.01, and below the 200-day MA of 9.17, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 43.68 is Neutral, neither overbought nor oversold. The STOCH value of 66.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	74 Outperform	$4.83B	27.07	39.53%	―	9.69%	9.50%
MDB	73 Outperform	$25.68B	―	-3.65%	―	21.90%	67.81%
VRNT	72 Outperform	$1.23B	26.21	4.72%	―	-2.32%	7.70%
VRNS	72 Outperform	$6.61B	―	-25.73%	―	14.29%	-14.42%
RDWR	66 Neutral	$1.05B	77.22	4.46%	―	11.51%	―
Sector *	61 Neutral	$35.09B	8.26	-10.57%	1.90%	8.56%	-9.51%
CGNT	52 Neutral	$642.57M	―	-4.06%	―	―	―

* Technology Sector Average

Performance Comparison

CGNT

Cognyte Software

8.65

1.17

15.64%

RDWR

Radware

24.82

3.70

17.52%

VRNT

Verint Systems

20.41

-6.13

-23.10%

QLYS

Qualys

135.88

12.16

9.83%

VRNS

Varonis Systems

55.43

3.25

6.23%

MDB

MongoDB

312.88

23.00

7.93%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Sep 04, 2025