Cognyte Software reported Q1 FY2027 results this morning and served up a split verdict. Revenue of $105.5M edged past the $105.2M consensus. EPS came in at $0.03 adjusted — a miss of $0.07 against the $0.09 estimate. The stock fell 5.1% on the day, giving back a chunk of a 12% weekly gain built up in the sessions before the print. That divergence — strong near-term momentum walking straight into a soft earnings delivery — is the defining tension of the week.
Short sellers have little to do with the day's move. Their position has collapsed over the past month, with short interest dropping 35.6% in a single week alone to just 0.48% of the free float. That is barely a rounding error in the lending market. At this level, short covering is not a factor and there is no squeeze dynamic at play. The lending pool is enormous — availability relative to short interest is at 3,281%, meaning shorts face zero friction in either direction.
The one wrinkle in the borrow market is cost. The fee to borrow CGNT shares has jumped 278% in a week to 2.42%, a spike that looks more mechanical than meaningful given the tiny share of float actually shorted. Options positioning is modestly more cautious than usual — the put/call ratio is at 0.34, slightly above its 20-day average of 0.30 — but the z-score of 1.1 is well within normal range. Nothing in positioning suggests outsized fear or conviction either way.
The Street's view is thin but tilted bullish. Lake Street initiated with a Buy and a $13 price target in March, roughly in line with the mean target of $12.33. Roth Capital also carries a Buy from October 2025 at $14. Needham has sat on Hold without a target for years. With the stock at $11.62, the bull case from the two active buyers implies modest upside. Management's FY2027 guidance affirmed adjusted EPS of $0.47 while widening revenue guidance to a $434.6M–$461.4M range around the $446M consensus — a non-committal reset that gives neither bulls nor bears a clean talking point. The factor scores are more encouraging: EPS momentum over 90 days ranks at the 94th percentile, and forward EPS growth year-on-year ranks at the 95th percentile — suggesting the earnings trajectory is improving even if single-quarter execution is uneven.
The institutional register is active. The top five holders control around 40% of shares. Value Base built its position by 520,000 shares through March, Neuberger Berman added 123,000, and Edenbrook Capital — the largest holder at 9.6% — added modestly. On the sell side, Topline Capital trimmed by 1.78 million shares to 6.7% and American Capital reduced by 212,000. The divergence within the holder base — long-only value names adding while a larger activist-style holder lightens — is worth watching heading into the next quarter.
Peers also sold off sharply on Tuesday. PD fell 5.1% on the day despite a 41% weekly surge. PLTR dropped 5.3% and NOW lost 6%. The sector-wide pullback cushions the read on CGNT's post-earnings weakness — it is harder to isolate company-specific selling when the entire peer group is under pressure on the same session. The next scheduled earnings event is June 8, which now appears to be a call rather than another release. The story to track from here is whether Q1's recurring revenue softness — noted in the bear case as a continuing trend — shows any stabilisation, and whether the widened guidance range signals genuine conservatism or uncertainty about the revenue mix.
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