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id: 595, Created by Stan Vick, Scout
Cognyte Software (CGNT) Financials Misguiding Case
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S.D. New YorkCourt
- Cognyte Software LTD (CGNT) released its Q1 2022 financial results that badly missed analyst estimates.
- $CGNT declined 28%, seriously damaging investors.
- Investors suspect Cognyte & its Leaders of multiple violations.
On June 28, 2022, Cognyte released its Q1 2022 financial results which badly missed analyst estimates across the board. Cognyte’s 1Q22 revenue of $87 million, represented a decline of 25%. Analysts were expecting a decline of 2%.
In response, analysts immediately downgraded the Company’s rating and reduced their price targets. William Blair, for example, downgraded Cognyte and concluded that Cognyte’s “low pipeline conversion” issues were a symptom of a broader problem, stating in the relevant part: Cognyte’s brand has been negatively impacted by increased scrutiny of the cyber intelligence industry and fellow Israel cyber surveillance firm NSO Group. Last fall, the U.S. government blacklisted the NSO Group after a multitude of reports surfaced that its software was being used inappropriately by governments to spy on citizens with dissenting views.
On this news, $CGNT declined 28.66%, seriously damaging investors.
Going back, on December 16, 2021, Meta issued a “Threat Report,” which included the results of its “months-long” investigation into the “surveillance-for-hire industry,” revealing for the first time that Cognyte (along with six private companies) regularly targeted, without their knowledge, journalists, dissidents, critics of authoritarian regimes, families of opposition, and human rights activists around the world, and collected intelligence on these people by manipulating them to reveal information and/or by compromising their devices and accounts, in violation of Facebook’s “multiple community standards and Terms of Service.”
On this news, $CGNT fell 5.11%, before declining another 5.5% the next trading day. By December 22, 2021, Cognyte’s stock had fallen to trade at $15 per share, representing a decline of nearly 21%.
Considering all representations and consequent results, Investors have grounds to suspect that the Company and its Leaders made multiple violations, which in turn led to damages for shareholders.
Failure to Disclose,
Shock Event Date
28 June 2022
01 March 2023
Lead Plaintiff Deadline
01 May 2023
Hon. Lorna G. Schofield