Info@NationalCyberSecurity
Info@NationalCyberSecurity

Cognyte Software (NASDAQ:CGNT): Investor Opportunity Fighting Cybercrime Surge | #cybercrime | #infosec


The surge in online and mobile interactions has given rise to an escalation of cybercrime in both frequency and scale, affecting countries, municipalities, businesses, and individuals. It’s estimated that damages from cybercrimes could reach approximately $10.5 trillion annually by 2025. Cybercriminals are constantly adapting their methods, which has spurred a global increase in demand for advanced technology and actionable intelligence provided by firms like Cognyte Software (NASDAQ:CGNT). The stock is up almost 63% in the past year; though a recent post-earnings announcement pullback may be overdone, presenting investors with a window of opportunity.

Providing Tools to Fight Cybercrime

Cognyte provides investigative analytics software to national security, law enforcement, national intelligence, and other security organizations. Its solutions are designed to counter potential threats to national security posed by criminal elements and terror networks.

The company has extended its capabilities into GenAI and cryptocurrency. Their decision intelligence platform enables authorities to construct a picture of suspects, organizations, companies, and financial accounts involved in illicit activities, allowing authorities to limit the ability of organized criminal groups to fund their operations.

Recent Financial Results and Outlook

The company recently reported Q4 and FY2024 financial results. Its revenue of $83.69 million for the quarter exceeded estimates, while EPS of -$0.23 beat expectations of -$0.27. Cognyte reported $314 million in revenue for the year, an annual increase of approximately 11% over the preceding year.

For FY 2025, management projects approximately 8.5% revenue growth, estimated to hit around $340 million. However, based on its revenue expectations, the company also forecasts a diluted loss per share of -$0.13.

The company boasts a robust financial position, with a solid cash balance of $83.3 million and no outstanding debts. It also has an extended credit facility of $65 million available until January 2026 to fund future growth.

What Is the Stock Price Forecast for CGNT?

While the stock had been trending up over the past year, the post-earnings pullback of roughly 20% has the stock trading toward the middle of its 52-week price range of $4.00-$8.53, which appears to be relatively undervalued, given its P/S ratio of 1.5x compared to the Information Technology sector average of 2.9x.

Analysts following the company have been cautiously optimistic about the stock, increasing price targets while maintaining neutral ratings. For instance, Evercore ISI analyst Kirk Materne recently raised the price target on shares of CGNT to $7.50 from $5.00, while maintaining an ‘In Line’ rating. He noted that the market’s reaction was out of step with the recent positive earnings and future outlook.

Cognyte is rated a HOLD based on three analyst recommendations and 12-month price targets issued in the past three months. The average price target for CGNT stock is $7.75, which represents a 15.16% upside from current levels.

Bottom Line on CGNT

Market demand is surging for cutting-edge technology and actionable intelligence to combat cybercrime, and Cognyte is well-positioned to capitalize on this need. Despite the recent post-earnings pullback, the company’s near-term outlook and solid financial position suggest it is poised for further growth. The company appears attractively valued and could offer investors a compelling opportunity in this sector.

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