WeeklyTrader
Posted - 1 month ago
A bright future awaits $CGNT! RSI: 53.87% 50-day MA: $7.01 200-day MA: $7.25
Fundamentalsguy
Posted - 09/23/24
Hey guys, I am posting this on seeking alpha in the next few days to get the word out. I like PLTR, but the valuation is high. CGNT basically does the same thing but is trading at 1x sales versus PLTR at 25x sales. I think both can work, but CGNT could have a lot more torque given the cheaper starting valuation. Thanks for considering. Cognyte ($CGNT) is the Palantir ($PLTR) for Value Investors Cognyte is an underfollowed and undervalued stock that has a dominant position providing national security agencies actionable intelligence for a safer word. I estimate that shares are worth $36/share in 5 years, giving the potential for 40% annualized return, based on 4x EV/sales, 16x EV/EBITDA, and 25x EV/FCF, which is a discount to software peers and a very large discount to Palantir (PLTR) which has the most comparable products and customer base. Cognyte serves over 400 customers in over 100 countries, with a meaningful presence in countries like UAE, Saudi Arabia, Brazil, India, Israel, Germany, Singapore, and the US. Cognyte’s customers are national security agencies, such as the equivalent of the CIA, FBI, NSA, and department of homeland security, in each of these respective countries. Cognyte generates 90% of its revenue from software sales and 10% from services, with a >71% gross margin. Its software is typically sold as on-premise perpetual licenses with ongoing maintenance and support contracts, which is preferred by many international government agencies, though its subscription business (~15% of revenue) is growly quickly. Customers use Cognyte’s software to solve crimes and detect and prevent crimes, in areas such as terrorism, drug trade, money laundering, and human trafficking. The company’s software system ingests data from many sources, including government crime databases, vehicle information, cell carrier data, open source intelligence (social media and other public data), etc. in order to create connections among suspects, highlight important insights that are hidden within billions and billions of data points in order for investigators to get answers faster or solve previously unsolved cases, which can save money and lives by solving crimes faster and possibly preventing crimes. Cognyte is not well understood in the investment community, in part because it is selling software to top secret government agencies. In addition, it is a spinoff of Verint (VRNT) on January 28th, 2021 near the peak of software valuations. The company set ambitious growth and margin targets, which it had to later walk back after an ~18 month period of very weak financial results, driven by elongated deal cycles, covid shifting customer budgets to health and away from national security, and in-ability to travel to meet with customers to sell them solutions because of covid. The stock took a deep plunge in 2022 from its spin price of $30 to a low below $3/share, and investors lost interest in the company and have not noticed the strong fundamentals. Cognyte has delivered four quarters of double-digit organic growth, significant operating leverage with >70% incremental operating margin over the last year, significantly improved revenue quality, and strong free cash flow which is causing cash to build up. Importantly, I do not think that Cognyte’s issues a couple years ago were due to competitive losses or a change in the competitive landscape. I think the business has very strong relationships with its government customers, and they are returning to their normal buying patterns, which gives the business continued runway for double digit organic growth. Further, Cognyte sold its Situational Intelligence Solutions (SIS) business which provided physical security guard solutions to enterprise customers (~$35m revenue) which was not core to its business. I estimate that shares will be worth $36/share in 5 years, based on 4x EV/sales, 16x EV/EBITDA, and 25x EV/FCF, which is a discount to software peers and a large discount to Palantir (PLTR) which has the most comparable product set. Cognyte has attractive business characteristics of a vertical market software business, which includes having very high retention rates, limited competition (PLTR, LHX, and ESLT), close with customer needs so can evolve the product, high barriers to entry because of decades of trust with government’s top secret data, high switching costs. Further, Cognyte has begun to benefit from increased deal size and velocity related to their artificial intelligence products. Government agencies are buying more Cognyte software because they want to use AI to better connect the dots to solve and prevent crimes, and also need solutions to keep up with criminals that are increasingly using AI in their activities to evade detection. I think Palantir has become the highest valued publicly traded software business on an EV/forward sales multiple of 25x because of these same dynamics – a sticky vertical market software sold to the government and increased sales momentum because of AI products. Cognyte’s solutions and product portfolio most closely matches with Palantir’s solutions, which are sold to a similar customer base and used for similar analysis. Palantir has a significant presence in the U.S. and also has a larger enterprise business, while Cognyte’s operations are focused on global government agencies. While the valuations are miles apart with PLTR at 25x forward sales and CGNT at 1.2x forward sales, the financial performance is not that far apart. PLTR’s organic growth over the last four quarters has averaged +17% y/y versus PLTR’s +21% organic growth. CGNT’s gross margins are 71% versus PLTR’s 83%. CGNT’s free cash flow margin at 7% lags further behind PLTR’s 28%, though I think that over the next 5 years, that gap will narrow (I expect CGNT’s FCF margin to be 16% in 5 years). In a the very unlikely scenario that CGNT was valued the same forward revenue multiple as PLTR, CGNT’s stock would trade at $130/share versus the current price of $6.60/share or using the same FCF multiple on my estimated FCF in 5 years, CGNT’s stock would be $120/share, which shows how far apart these businesses are valued, despite a similar product and customer base. What are the factors that change the market’s perception of Cognyte? (1) First and most importantly, continuing to deliver financial results as they have been doing, with revenue growing >10% and profit margins expanding rapidly. I expect that Cognyte will inflect to GAAP profitability in two quarters and remain GAAP profitable every quarter going forward from there, which will creates additional interest in the stock and has been meaningful catalyst for other small cap technology stocks. (2) The company’s revenue quality has meaningfully improved over the last few years. In particular, 5-7 years ago, the business began transitioning from a system integrator business with <50% software to a pure software company now with >90% of revenue from software. Related to that, the company previously sold its solutions along with the hardware (servers) that the software ran on. A few years ago, the company rewrote its software to operate on standard hardware so that government agencies procure the hardware separately. That has led to gross margins increasing from less than 60% to over 71% and there is more room to go. Further, Cognyte’s subscription revenue has grown from nearly zero to 15% of revenue, which is a higher quality type of revenue, and it will continue to grow faster than the company’s overall revenue growth. Cognyte has seen significantly improved cash collection and free cash flow over the last ~18 months, which indicates more conservative revenue recognition and increasingly durable revenue growth. Finally, Cognyte is growing its U.S. business, primarily selling to state and local police to be used by field officers. As the U.S. becomes a higher mix of Cognyte’s revenue, I think that will result in a better appreciation for Cognyte’s business and a higher valuation. (3) A share buyback program is likely to be announced in the next 6-12 months, based upon the company’s strong cash balance with no debt and continued free cash flow generation. (4) The demand for Cognyte’s products is accelerating with the world becoming an increasingly dangerous place and government’s re-committing to budgets national security, as funds shift away from fighting the covid health crisis. The war in Ukraine and the escalating conflict in Israel are causing government agencies to prioritize spending on intelligence solutions, such as Cognyte. Valuation I expect that Cognyte will grow revenue at 11-15% per year over the next 5 years versus last 12 months average organic growth of +17% and previous guidance at time of spin which called for low-mid teens organic growth. Before the spin, the business had a 25-year track record of growing >10%. I expect adj EBITDA margin to continue to expand to 22% in FY30, resulting in $141m of EBITDA. I estimate the business will generate $103m of FCF (16% FCF margin). Resulting in $1.44/share of FCF in FY30. I estimate the business is worth $36/share in FY30 which is 5 years away, based on 4x EV/sales, 16x EV/EBITDA, and 25x EV/FCF. That gives the potential for a 40% annualized return over the next 5 years. I arrive at those valuation multiples, based on a mix of software companies with a similar profile and defense companies with a similar profile. Some comps to consider are CLBT, ELST, LHX, PLTR, CHKP. Risks • Government sales cycles can be hard to predict, which can cause financial performance to disappoint. Though, the business has very strong backlog of revenue (RPO) that covers >90% of the revenue over the next year. • The business may not expand margins as much as I expect. • A cyber breach could cause reputational damage to the company. • The business is difficult to understand and check-in with customers because they are top secret agencies.
Will2ride1
Posted - 2 months ago
$CGNT recent insider buying 👀 🦬🦬🦬
PenkeTrading
Posted - 2 months ago
I found you an Oversold RSI (Relative Strength Index) on the daily chart of Cognyte Software Ltd. Is that bullish or bearish? $CGNT #CGNT #nasdaq #tradingsignals #technicalanalysis
OpenOutcrier
Posted - 2 months ago
$CGNT (+8.2% pre) Cognyte Reports Strong Second Quarter Fiscal 2025 Financial Results - StockTitan https://ooc.bz/l/42014
DonCorleone77
Posted - 2 months ago
$CGNT Cognyte sees FY25 EPS (7c), consensus (3c) Sees FY25 revenue $347M at the midpoint with a range of +/-2%, representing approximately 11% growth from the previous year revenue. Consensus $343.4M.
DonCorleone77
Posted - 2 months ago
$CGNT Cognyte reports Q2 EPS 5c, consensus (2c) Reports Q2 revenue $84.4M, consensus $83.69M..."We delivered strong second-quarter results as we continued to execute on our growth strategy and business plan," said Elad Sharon, Cognyte's chief executive officer. "A healthy market and the tangible operational outcomes our solutions generate for customers are resulting in follow-on orders and driving new customer acquisitions." He added, "At the core of our work is our mission to make the world a safer place. Our leading AI-driven solutions empower customers to confront significant, evolving threats, accelerate investigations, enable faster decision-making and mitigate a wide range of security challenges." Cognyte has grown revenue by more than 11% in the first six months of fiscal 2025," said David Abadi, Cognyte's chief financial officer. "We delivered $13.3 million in Adjusted EBITDA, marking a meaningful improvement compared to almost breakeven results in the first half of the prior fiscal year. Our advanced solutions deliver significant value to our customers, driving demand. As a result of market conditions and our strong execution, we are once again raising our full-year outlook."
Tokenist
Posted - 2 months ago
🚀 $CGNT Surprises with Q2 Earnings! 📈 Cognyte Software crushes expectations in Q2 FY2025, posting a non-GAAP EPS of $0.05, turning around from last year's -$0.03. Revenue soars to $84.4M, beating forecasts and showing a solid 11% YoY growth! 💹 The secret? A sharp focus on AI-driven analytics software, powering up customer acquisitions and follow-on orders. 🧠✨ With these stellar results, $CGNT raises its full-year guidance—eyeing about $347M in revenue. Betting on continued strong demand, they're setting up for a groundbreaking fiscal year. 📊📈 Stay tuned as Cognyte powers through 2025! #StockMarket #EarningsLeap
epsguid
Posted - 2 months ago
$CGNT reported a loss of $0.02, consensus was ($0.07) via @eWhispers #epsbeat http://eps.sh/d/cgnt
Thestocktraderhubzee
Posted - 2 months ago
$CGNT Cognyte Software Q2 2025 Adj. EPS $0.05 Beats $(0.02) Estimate, Sales $84.413M Beat $83.694M Estimate
Stock_Titan
Posted - 2 months ago
$CGNT Cognyte Reports Strong Second Quarter Fiscal 2025 Financial Results
https://www.stocktitan.net/news/CGNT/cognyte-reports-strong-second-quarter-fiscal-2025-financial-yez2t9syu7uo.html
Stock_Titan
Posted - 2 months ago
$CGNT Cognyte Shareholders Reelect Both of the Company’s Director Nominees and Support the Proposal to Approve Amendments to the CEO’s Compensation Plan at Annual Meeting
https://www.stocktitan.net/news/CGNT/cognyte-shareholders-reelect-both-of-the-company-s-director-nominees-jxqhj1190zg4.html
Stock_Titan
Posted - 08/29/24
$CGNT Value Base’s proposals receive support of Neuberger Berman, a leading global investment manager and a top shareholder of Cognyte, which intends to vote at the Cognyte Software AGM:
https://www.stocktitan.net/news/CGNT/value-base-s-proposals-receive-support-of-neuberger-berman-a-leading-ordfdybca4za.html
Stock_Titan
Posted - 08/29/24
$CGNT Cognyte to Announce Second Quarter FYE25 Financial Results on September 10, 2024
https://www.stocktitan.net/news/CGNT/cognyte-to-announce-second-quarter-fye25-financial-results-on-zx0zft2467zc.html
Stock_Titan
Posted - 08/27/24
$CGNT EMDA, a leading Israeli Proxy Advisor, backs Value Base at the Cognyte Software Limited (“Cognyte”) Shareholder Meeting
https://www.stocktitan.net/news/CGNT/emda-a-leading-israeli-proxy-advisor-backs-value-base-at-the-cognyte-a1gka78moat0.html
Stock_Titan
Posted - 08/27/24
$CGNT Cognyte Issues Letter to Shareholders Highlighting Recent Progress and Momentum
https://www.stocktitan.net/news/CGNT/cognyte-issues-letter-to-shareholders-highlighting-recent-progress-v7zdsv3unxe6.html
Stock_Titan
Posted - 3 months ago
$CGNT Value Base Urges Cognyte Shareholders to Vote for its Highly Qualified Director Candidate and Against Certain Company Proposals
https://www.stocktitan.net/news/CGNT/value-base-urges-cognyte-shareholders-to-vote-for-its-highly-g74kq53tap6u.html
Stock_Titan
Posted - 3 months ago
$CGNT Cognyte Releases Investor Presentation Highlighting Business Momentum in Advance of Annual Meeting
https://www.stocktitan.net/news/CGNT/cognyte-releases-investor-presentation-highlighting-business-dg6jxv41e3mf.html
Stock_Titan
Posted - 3 months ago
$CGNT Cognyte Software Sends Letter to Shareholders Highlighting the Company’s Operational Performance and Recent Business Improvements
https://www.stocktitan.net/news/CGNT/cognyte-software-sends-letter-to-shareholders-highlighting-the-s51t5alt5ga5.html
NVDAMillionaire
Posted - 07/29/24
$CGNT Cogentix Medical, Inc. (NASDAQ:CGNT): Consistent Profitability and Margin Expansion Driving Shareholder Value http://beyondspx.com/2024/07/29/cogentix-medical-inc-nasdaqcgnt-consistent-profitability-and-margin-expansion-driving-shareholder-value/ "Cogentix Medical, Inc. is a well-positioned global medical device company that has demonstrated its ability to deliver consistent and profitable financial results. The company’s focus on innovation, customer relationships, and margin expansion has enabled it to generate strong cash flow and position itself for continued growth and shareholder value creation."
DonCorleone77
Posted - 4 months ago
$CGNT Cognyte gets $10M follow-on order from EMEA customer Cognyte Software announced a $10 million follow-on order from a national security agency, a long-term Cognyte customer in the Europe-Middle East-Africa region. This follow-on order enables the customer to derive additional value by extracting more insights from their constantly growing data volumes.
Stock_Titan
Posted - 4 months ago
$CGNT Cognyte Secures $10 Million Expansion with National Security Agency in EMEA
https://www.stocktitan.net/news/CGNT/cognyte-secures-10-million-expansion-with-national-security-agency-b2g94f1xep7k.html
Keaka
Posted - 5 months ago
$CGNT what is the deal with this they beat the earnings
