Cognyte Software Ltd. (CGNT) came out with quarterly earnings of $0.02 per share, beating the Zacks Consensus Estimate of a loss of $0.01 per share. This compares with earnings of $0.34 per share a year ago. These figures have been adjusted for one-off items.
This quarterly report represents a 300% earnings surprise. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a profit of $0.05, delivering a surprise of 350%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Cognyte Software, which belongs to the Zacks Internet – Software industry, posted revenues of $89 million for the quarter ended October 2024, surpassing the Zacks Consensus Estimate by 2.54%. This compares to revenues of $79.39 million a year ago. The company has surpassed consensus revenue estimates three times over the last four quarters.
The sustainability of the stock’s immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management’s commentary on the earnings outlook.
Shares of Cognyte Software have gained about 34.1% since the beginning of the year, versus the S&P 500’s gain of 26.5%.
While Cognyte Software has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the stock?
There are no easy answers to this important question, but one reliable measure that can help investors address this issue is the company’s earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock prices and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Prior to this earnings release, the estimate revision trend for Cognyte Software was mixed. While the magnitude and direction of estimate revisions could change following the company’s just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how the estimates for the coming quarters and the current fiscal year will change in the coming days. The current consensus EPS estimate is -$0.01 on $90.8 million in revenues for the coming quarter and -$0.07 on $344.7 million in revenues for the current fiscal year.
