Analyzing Constellation Software (OTCMKTS:CNSWF) and Cognyte Software (NASDAQ:CGNT)

Cognyte Software (NASDAQ:CGNT) and Constellation Software (OTCMKTS:CNSWF) are both computer and technology companies, but which is the superior stock? We will contrast the two businesses based on the strength of their earnings, dividends, institutional ownership, risk, profitability, analyst recommendations and valuation.

Risk & Volatility

Cognyte Software has a beta of 1.64, suggesting that its share price is 64% more volatile than the S&P 500. Comparatively, Constellation Software has a beta of 1.03, suggesting that its share price is 3% more volatile than the S&P 500.

Insider & Institutional Ownership

72.9% of Cognyte Software shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Cognyte Software and Constellation Software’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cognyte Software	-1.45%	-2.24%	-0.99%
Constellation Software	4.22%	49.29%	13.15%

Earnings & Valuation

This table compares Cognyte Software and Constellation Software”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cognyte Software	$350.63 million	1.74	-$12.05 million	($0.08)	-104.80
Constellation Software	$11.62 billion	3.39	$512.00 million	$23.18	80.21

Constellation Software has higher revenue and earnings than Cognyte Software. Cognyte Software is trading at a lower price-to-earnings ratio than Constellation Software, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Cognyte Software and Constellation Software, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cognyte Software	1	2	2	0	2.20
Constellation Software	0	2	6	0	2.75

Cognyte Software currently has a consensus price target of $13.50, indicating a potential upside of 61.02%. Given Cognyte Software’s higher possible upside, research analysts clearly believe Cognyte Software is more favorable than Constellation Software.

Summary

Constellation Software beats Cognyte Software on 10 of the 13 factors compared between the two stocks.

About Cognyte Software

Cognyte Software Ltd. provides an investigative analytics software to governments and enterprises worldwide. Its Actionable Intelligence for a Safer World, an open software designed to help governments and enterprises accelerate and enhance the effectiveness of investigations. The company offers network intelligence analytics, threat intelligence analytics, decision intelligence analytics, and operational intelligence analytics solutions. Its solutions are designed to support various use cases and support a range of users, including data analysts, investigation managers, and security operations center operators, as well as operational field teams. In addition, the company provides customer support, professional, and integration services. Its government customers include national, regional, and local government agencies. Cognyte Software Ltd. was incorporated in 2020 and is headquartered in Herzliya, Israel.

About Constellation Software

Constellation Software Inc., together with its subsidiaries, acquires, builds, and manages vertical market software businesses in Canada, the United States, Europe, and internationally. It provides mission critical software solutions for public and private sector markets. The company is also involved in the software licensing; and sale of third-party hardware. In addition, it offers professional, and maintenance and other recurring services. Constellation Software Inc. was incorporated in 1995 and is headquartered in Toronto, Canada.