Cognyte Software (CGNT) saw its shares surge in the last session with trading volume being higher than average. The latest trend in earnings estimate revisions
Cognyte Software Ltd. CGNT shares soared 7% in the last trading session to close at $10.57. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock's 12.2% gain over the past four weeks.
The increase in share price can be attributed to growing confidence in the company’s long-term prospects.
Cognyte provides data processing and AI-driven investigative analytics solutions primarily to governments and law enforcement agencies. As simmering geopolitical tensions spawn complex and massive volumes of data, the demand for such solutions is exploding.
Cognyte delivered double-digit revenue growth, with fiscal 2026 revenues rising 14.1% year over year. Demand from repeat customers, as well as increasing new customers, cushioned the top-line performance.
Management noted that the installed base forms a significant portion of revenues, highlighting customer stickiness. In the fourth quarter of fiscal 2026, recurring revenues were up 5.6% to $50 million, representing 47.1% of total revenues. Pivot to subscription model bodes well.
CGNT recently announced that it won a $20 million plus, three-year subscription contract with a “long-standing customer” in the Europe/Middle East/Africa region, underscoring both demand visibility and customer stickiness.
The company’s backlog and remaining performance obligations (“RPO”) strengthen revenue visibility. Total RPO stood at $557.2 million, with a backlog of $433.4 million at the end of fiscal 2026. Total RPO is the sum of contract liabilities and backlog. As a result, the company now expects fiscal 2027 revenues to be $448 million (+/-3%) compared with $400 million in fiscal 2026.
This company is expected to post quarterly earnings of $0.10 per share in its upcoming report, which represents a year-over-year change of +42.9%. Revenues are expected to be $105.3 million, up 10.2% from the year-ago quarter.
While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For Cognyte Software, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on CGNT going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Cognyte Software is part of the Zacks Internet - Software industry. Rekor Systems, Inc. REKR, another stock in the same industry, closed the last trading session 4.4% higher at $0.89. REKR has returned 8.4% in the past month.
Rekor Systems' consensus EPS estimate for the upcoming report has remained unchanged over the past month at -$0.05. Compared to the company's year-ago EPS, this represents a change of +50%. Rekor Systems currently boasts a Zacks Rank of #3 (Hold).
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