TEL AVIV – Value Base Ltd., holding roughly 9.33% of Cognyte Software Ltd. (NASDAQ:CGNT) shares, has garnered support from Neuberger Berman for its proposals at Cognyte’s upcoming annual shareholders meeting on September 4, 2024. Neuberger Berman, owning about 7.16% of Cognyte’s shares, aligned with Value Base in opposing the re-election of Chairman Earl Shanks and the CEO compensation plan.
The investment manager’s stance was influenced by Cognyte’s lack of transparency in reporting industry-standard key performance indicators (KPIs), which Neuberger Berman believes contributed to the company’s share price plummeting over 70% since its 2021 public listing. Additionally, Neuberger Berman criticized the CEO compensation plan for not adequately incentivizing long-term performance and for guaranteeing equity pay in dollar terms, which they find problematic.
Value Base also advocates for the election of its Managing Partner, Tal Yaacobi, to Cognyte’s board, citing the need for change to reverse the company’s declining share value. Yaacobi’s election is seen as a step towards addressing the absence of directors with relevant industry experience, which has been a concern despite the appointment of three new directors in the last three years.
This shareholder activism comes at a critical time for Cognyte, as Value Base urges other shareholders to vote for Yaacobi’s board election and against the re-election of Chairman Shanks and the CEO compensation plan. The call for change underscores the shareholders’ dissatisfaction with the current board’s performance and strategic direction.
Value Base, led by Victor Shamrich and Ido Neuberger, is a prominent investment banking group in Israel, known for its expertise in capital markets and strategic financial consulting. The group’s private investment fund, Value Base Fund, with Tal Yaacobi at its helm, has raised approximately $200 million and is expected to make significant investments in Israeli companies.
This news is based on a press release statement from Value Base Ltd., and the annual shareholders meeting will determine the outcome of these proposals.
In other recent news, Cognyte Software Ltd. has achieved a series of promising developments. The company reported a 13% rise in revenue to $83 million and a 17% increase in gross profit for the first quarter of fiscal year 2025. Based on this strong performance, Cognyte raised its outlook for the fiscal year, projecting a 10% year-over-year revenue growth to approximately $344 million.
Furthermore, Cognyte received support from proxy advisory firms Glass, Lewis & Co., LLC and Institutional Shareholder Services for its proposed amendments to the CEO compensation plan. These firms also advised against the election of Value Base Fund’s director nominee, Tal Yaacobi, to Cognyte’s board, citing a lack of relevant professional expertise.
Cognyte also announced its intention to appoint a new independent director with relevant U.S. experience. This announcement was made in a letter to shareholders ahead of the Annual Meeting. The company also secured a $10 million follow-on order from a national security agency in the Europe-Middle East-Africa region. These are among the recent developments at the company.
InvestingPro Insights
As Cognyte Software Ltd. (NASDAQ:CGNT) approaches its annual shareholders meeting, several key metrics from InvestingPro provide a snapshot of the company’s financial health and market performance. Notably, Cognyte holds more cash than debt on its balance sheet, which may offer some reassurance to investors concerned about the company’s financial stability. This is a critical point of consideration for shareholders as they evaluate the company’s strategic direction and governance.
InvestingPro Data shows that Cognyte’s market capitalization stands at $545.68 million, with a negative P/E ratio of -44.73, reflecting the market’s current view of the company’s earnings potential. The revenue for the last twelve months as of Q1 2025 was reported at $322.85 million, with a growth rate of 8.02%, indicating some positive momentum in the company’s sales figures. Despite these gains, the company’s gross profit margin remains strong at 69.39%, suggesting that Cognyte maintains a solid grip on its cost of goods sold relative to its revenue.
InvestingPro Tips reveal that analysts have recently revised their earnings estimates upwards for Cognyte, suggesting potential optimism about the company’s future performance. However, they do not anticipate the company will be profitable this year, which may be a point of contention for shareholders like Value Base Ltd. and Neuberger Berman. Additionally, the stock’s recent price movements have been quite volatile, with a 1-year price total return of 59.78%, reflecting the uncertainties surrounding the company’s outlook.
For investors seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/CGNT, which could provide further insights into Cognyte’s investment potential. These tips could be particularly valuable for shareholders as they make informed decisions at the upcoming annual meeting.
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