Cognyte Software: Margins Are Expanding As Backlog Builds
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Gary Alexander32.81K FollowersFollow5ShareSavePlay(8min)Comment(1)SummaryCognyte Software offers a compelling AI-driven public sector platform, underappreciated relative to peers and trading at modest multiples despite robust growth catalysts.CGNT delivered a Q3 beat-and-raise, demonstrating resilience amid macro headwinds, and is generating meaningful profit with a clean, debt-free balance sheet.The company targets $400 million FY26 revenue (+14% y/y) and $47 million adjusted EBITDA (12% margin), with a three-year plan for $500 million revenue and >20% EBITDA margin by FY28.I reiterate a "Buy" rating on CGNT, viewing the post-earnings rally as the start of a longer-term upward re-rating as the market recognizes its earnings potential. Jonathan Kitchen/DigitalVision via Getty Images As we near the end of 2025, I continue to emphasize the need for a portfolio rotation out of expensive large-cap growth stocks and into individual small- and mid-cap names that have less correlation to the broader market. We don't need to eliminateThis article was written byGary Alexander32.81K FollowersFollowWith combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.Analyst’s Disclosure:I/we have a beneficial long position in the shares of CGNT either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.Recommended For You