Cognyte Software (CGNT) AI Stock Analysis

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Cognyte Software

(NASDAQ:CGNT)

Rating:51Neutral

Price Target:

$9.50

▼(-0.84%Downside)

Cognyte's stock score of 51 reflects its financial challenges with declining revenues and net losses, offset by improving cash flows. While the earnings call provided positive guidance and strategic acquisitions, the stock's technical indicators suggest bearish trends, and its valuation remains unattractive due to negative earnings.

Positive Factors

Acquisitions

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

Customer Growth

The company continues to demonstrate success in acquiring new customers; adding 9 New Logos in the October quarter.

Financial Performance

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

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.

Revenue Growth Expectations

The announcements were expected to result in a more meaningful lift to the FY26 Revenue outlook compared to the $3 Million raise received.

Visibility Challenges

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.'

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

Market Cap

$689.34M

Dividend YieldN/A

Average Volume (3M)305.87K

Price to Earnings (P/E)―

Beta (1Y)0.71

Revenue GrowthN/A

EPS GrowthN/A

CountryUS

Employees1,623

SectorTechnology

Sector Strength82

IndustrySoftware - Infrastructure

Share Statistics

EPS (TTM)0.07

Shares Outstanding71,956,190

10 Day Avg. Volume476,255

30 Day Avg. Volume305,873

Financial Highlights & Ratios

PEG Ratio0.30

Price to Book (P/B)4.12

Price to Sales (P/S)0.00

P/FCF Ratio39.95

Enterprise Value/Market Cap2.42

Enterprise Value/Revenue1.24

Enterprise Value/Gross Profit6.86

Enterprise Value/Ebitda97.47

Forecast

1Y Price Target

$10.00

Price Target Upside4.38% Upside

Rating ConsensusHold

Number of Analyst Covering2

Cognyte Software Business Overview & Revenue Model

Company DescriptionCognyte Software Ltd. (CGNT) is a global leader in security analytics software, providing solutions that empower governments and enterprises with actionable intelligence to anticipate, detect, and mitigate security threats. Operating primarily within the security and intelligence sectors, Cognyte offers a range of products designed to analyze vast amounts of data, uncover insights, and enhance decision-making for security operations.

How the Company Makes MoneyCognyte Software makes money by selling its security analytics software solutions to government agencies and enterprise clients worldwide. The company generates revenue through software licensing, maintenance, and support services. Key revenue streams include licensing fees for their proprietary analytics platforms, subscription-based services for ongoing software updates and support, and consulting services to customize and integrate their solutions into clients' existing systems. Additionally, partnerships with technology providers and system integrators contribute to enhancing the company's market reach and revenue potential.

Cognyte Software Earnings Call Summary

Earnings Call Date:Jun 11, 2025

(Q1-2026)

% Change Since: -12.99%|

Next Earnings Date:Sep 16, 2025

Earnings Call Sentiment Positive

Cognyte's earnings call reflects a positive outlook with significant revenue growth and major customer acquisitions, despite some concerns over cash flow and deferred revenue. The acquisition of GroupSense and strong market engagement further bolster the positive sentiment.

Q1-2026 Updates

Positive Updates

Significant Revenue Growth

Cognyte reported a 16% year-over-year revenue increase for Q1 of fiscal 2026, reaching $95.5 million.

Strong EBITDA Performance

Adjusted EBITDA for the quarter was approximately $10 million, more than double compared to the same quarter last year.

Major Customer Wins

Cognyte signed a multi-year support agreement with a national security customer valued at over $20 million per year, and a new 3-year subscription agreement worth over $10 million per year.

Acquisition of GroupSense

Cognyte acquired GroupSense, enhancing its cyber threat intelligence capabilities and expanding its U.S. customer base by approximately 50 customers.

Positive Market Engagement

The company received positive feedback and strong customer engagement at global events, showcasing its AI-powered solutions.

Negative Updates

Cash Flow and Free Cash Flow Concerns

Cash flow from operations was $1.7 million, with a negative free cash flow of $2.5 million due to timing of collections.

Deferred Revenue Decline

Deferred revenue decreased slightly to $113 million, influenced by billing timing.

RPO Challenges

Only the first year of a major $10 million subscription deal is included in RPO due to deal terms, affecting future revenue visibility.

Company Guidance

During the Cognyte First Quarter Fiscal Year 2026 Earnings Conference Call, the company provided updated guidance reflecting a positive start to the fiscal year. Cognyte reported a 16% year-over-year increase in revenue to $95.5 million and a significant growth in adjusted EBITDA, which more than doubled to approximately $10 million compared to Q1 of the previous year. Non-GAAP gross margin expanded to 71.9%. For fiscal year 2026, Cognyte expects revenue of approximately $395 million, representing a 13% year-over-year growth at the midpoint, with an adjusted EBITDA of about $44 million, indicating a 50% increase. The guidance update primarily accounts for the acquisition of GroupSense, which is expected to add $3 million in subscription-based revenue. The company maintains a strong cash position at $102.9 million with no debt and continues to anticipate cash flow from operations of $45 million for the year.

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.

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	10.96M	18.28M
	EBITDA
9.38M	573.00K	-77.35M	29.73M	47.43M
	Net Income Common Stockholders
-12.05M	-15.57M	-114.13M	-14.89M	14.20M
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

Negative

Last Price9.58

Price Trends

50DMA

10.02

Negative

100DMA

9.57

Negative

200DMA

8.57

Positive

Market Momentum

MACD

0.12

Positive

RSI

33.07

Neutral

STOCH

22.13

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 9.58 is below the 20-day moving average (MA) of 10.67, below the 50-day MA of 10.02, and above the 200-day MA of 8.57, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 33.07 is Neutral, neither overbought nor oversold. The STOCH value of 22.13 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	78 Outperform	$5.09B	28.75	40.23%	―	9.58%	12.41%
MDB	78 Outperform	$17.41B	―	-4.00%	―	19.24%	59.66%
VRNT	73 Outperform	$1.15B	24.39	5.32%	―	-2.09%	76.96%
RDWR	72 Outperform	$1.04B	91.93	3.78%	―	9.54%	―
VRNS	64 Neutral	$5.65B	―	-22.21%	―	13.34%	13.71%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
CGNT	51 Neutral	$689.34M	―	-4.06%	―	―	―

* Technology Sector Average

Performance Comparison

CGNT

Cognyte Software

9.42

1.34

16.58%

RDWR

Radware

24.41

6.20

34.05%

VRNT

Verint Systems

18.32

-17.38

-48.68%

QLYS

Qualys

140.68

2.49

1.80%

VRNS

Varonis Systems

49.30

7.46

17.83%

MDB

MongoDB

210.66

-7.52

-3.45%

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.