(COGT) Cogent, Inc – results were driven by demand from the Department of Homeland Security

Cogent, Inc.’s (COGT) share price has been surging for the last 3 weeks after the company reported strong third-quarter results in early November. Cogent also has a pristine balance sheet, sitting on a $456 million cash position and no debt.

Company Description

Cogent, Inc. provides automated fingerprint identification systems and other fingerprint biometrics solutions to government agencies and various organizations worldwide. The company has a market cap of $1.25 billion.

Third-Quarter Results

Cogent released third-quarter results on Nov 5 that were ahead of analyst estimates. Revenue came in at $35 million, up from $22.5 million last year. Net income jumped to $12 million, a substantial increase from last year’s $4.1 million. This produced earnings of 13 cents per share, ahead of analyst estimates by one penny.

Consistent Results

This was the fourth time in the last four quarters that the company has surprised and beat analyst estimates, having done so by an average of 1 cent, or 12%.

The company noted that its strong quarterly results were driven by demand from the Department of Homeland Security and Morocco, and a wide cross section of domestic and international customers.

Financial Profile

Cogent flexed some financial muscle during the report, saying it generated $34 million in cash from operations in the quarter, and even more impressive, carries $456 million in cash and investments with no debt.

Estimates

The current-year estimate stands at 52 cents per share, while the next-year estimate is pegged at 55 cents. Based upon the current-year estimate, this stock has a forward P/E multiple of 27X, a steep premium to the overall market.

The Chart

Shares of COGT have been rallying since finding a short-term bottom above $8.50 in mid November. Since then, this stock has topped off above another short-term level just a pinch below $14. Take a look below.

Content Courtesy: Zacks Investment Research

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