Why Cognyte Software Stock Is Plummeting Today
Key Points
Cognyte beat Wall Street's sales target for fiscal Q1, but earnings came in below expectations.
The company reiterated its previously issued full-year guidance, but investors are worried about the profitability outlook.
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Cognyte Software (NASDAQ: CGNT) stock is getting hit with a big pullback on the heels of the company's latest quarterly release. The artificial intelligence (AI) company's share price was down 20.1% as of 11:55 a.m. ET.
Before today's market open, Cognyte published results for the first quarter of its 2027 fiscal year -- which ended April 30. While the company posted sales that topped Wall Street's expectations, earnings per share came in below the average forecast.
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Cognyte stock slips on mixed Q1 print
Cognyte recorded non-GAAP (adjusted) earnings per share of $0.03 on sales of $105.5 million in fiscal Q1. While the company's sales were up 10.4% year over year and beat the average Wall Street analyst estimate by $0.46 million, the company's adjusted profit came in $0.06 per share lower than what was called for by the average analyst estimate. With the company's profit margin coming in significantly weaker than expected and earnings missing Wall Street's forecast despite a sales beat in the period, investors are feeling less confident about the business's outlook.
What's next for Cognyte?
Along with its fiscal Q1 report, Cognyte reiterated guidance for sales of $448 million this year. The company's guidance actually topped Wall Street's forecast for sales of roughly $446 million in the period.
Meanwhile, the company's reiterated guidance for adjusted earnings of $0.47 was in line with Wall Street's forecast prior to the latest quarterly release. With profits coming in significantly below expectations, investors are likely worried that it's become increasingly likely that the business will miss its profit forecast.
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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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