CommVault Systems
CVLT
$120.02
-19.70%
CommVault Systems provides cyber resiliency solutions that help enterprises protect, secure, and recover data, applications, and identity systems amid rising cyber threats. The company operates in the software-application industry, focusing on data protection, cyber recovery, and governance through its Commvault Cloud platform. As a recognized leader in data management and security, CommVault is distinct for its unified cloud-native approach spanning on-premises, hybrid, and multi-cloud environments. The current investor narrative centers on accelerating subscription revenue growth and margin expansion as the company transitions from perpetual licenses to a subscription-based model, with recent quarterly results showing strong top-line momentum and improving profitability.…
CVLT
CommVault Systems
$120.02
CVLT 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CommVault Systems's 12-month outlook, with a consensus price target around $162.40 and implied upside of +35.3% versus the current price.
Average Target
$162.40
0 analysts
Implied Upside
+35.3%
vs. current price
Analyst Count
—
covering this stock
Price Range
$130 - $200
Analyst target range
The stock is covered by 16 analysts, with a consensus recommendation of 'Buy' (mean rating of 1.83 on a 1-5 scale, where 1 is Strong Buy). The average target price is $159.15, implying 11.8% upside from the current price of $142.31. The distribution leans bullish, with no sell ratings and a majority of buy-equivalent ratings. Recent actions include reaffirmations of Overweight/Outperform from Stephens, Mizuho, Keybanc, and Baird, while William Blair downgraded to Market Perform from Outperform in March 2026. The target range spans from a low of $100.00 to a high of $200.00, indicating significant divergence in analyst views. The high target of $200.00 assumes a full recovery to the 52-week high and likely reflects optimism about subscription growth and margin expansion. The low target of $100.00 implies a 30% downside, potentially pricing in competitive pressures or a slowdown in the transition. The wide spread ($100 range) suggests high uncertainty about the pace of growth and the sustainability of the recent rally. The consensus EPS estimate for the next fiscal year is $7.86, which, if achieved, would justify the forward P/E of 23.6x and support the average target.
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Bulls vs Bears: CVLT Investment Factors
CommVault presents a compelling growth story driven by its successful transition to a subscription-based model, with accelerating revenue growth and expanding margins. The bull case is supported by strong free cash flow, improving profitability, and a consensus Buy rating with 11.8% upside to the average target. However, the bear case highlights a premium trailing P/E relative to peers, high debt levels, and wide analyst dispersion that reflect execution risk. The single most important tension is whether the company can sustain its subscription growth momentum and deliver on aggressive earnings expectations (forward P/E of 23.6x implies ~100% EPS growth) without disappointing. Currently, the bull case has stronger evidence given the recent operational momentum and analyst support, but the stock's valuation leaves limited margin of safety.
Bullish
- Strong subscription revenue growth: Subscription revenue reached $207.6 million in Q4 FY2026, representing 66.6% of total revenue, up from 55% in the prior year. This shift to recurring revenue provides better visibility and higher lifetime customer value.
- Improving profitability and margins: Operating margin improved to 11.3% in Q4 from 6.3% in Q3, demonstrating operating leverage. Gross margin remains strong at 80.6%, indicating stable pricing and efficient cost management.
- Healthy free cash flow generation: Trailing twelve-month free cash flow is $237.2 million, representing a 6.9% FCF yield on the current market cap. This provides financial flexibility for investments or potential shareholder returns.
- Analyst consensus Buy with upside: The average analyst target price is $159.15, implying 11.8% upside from the current price of $142.31. The consensus rating is Buy (1.83 on a 1-5 scale), with no sell ratings.
Bearish
- Elevated trailing P/E premium: The trailing P/E of 48.4x is 38% above the software-application industry average of ~35x. This premium leaves little room for error; any earnings miss could trigger multiple compression.
- High debt-to-equity ratio: Debt-to-equity stands at 122.4%, elevated due to recent debt issuance. While interest coverage is strong at 24.6x, the high leverage increases financial risk in a rising rate environment.
- Wide analyst target dispersion: Analyst targets range from $100.00 (30% downside) to $200.00 (40% upside), indicating significant uncertainty about the company's growth trajectory and valuation.
- Negative 1-year price performance: Despite a 51.5% rally over the past 3 months, the stock is still down 14.3% over the past year. The recovery is recent and may not be sustainable if growth decelerates.
CVLT Technical Analysis
The stock is in a strong recovery uptrend after a significant drawdown, with a 1-year price change of -14.3% but a remarkable 3-month gain of +51.5%. Currently trading at $142.31, it sits at 55.7% of its 52-week range ($71.75 low to $200.68 high), indicating it has rebounded from the lows but remains well below the highs. This positioning suggests the stock is in a recovery phase, with momentum building but still having room to run before reaching prior peaks. Short-term momentum is accelerating sharply, with a 1-month change of +8.8% and a 3-month change of +51.5%, far outpacing the SPY's 1-month and 3-month gains of 0.8% and 3.5%, respectively. The relative strength over 3 months is +48.0%, confirming strong outperformance. However, the 1-year change remains negative (-14.3%), indicating that the recent rally is a reversal from a prolonged downtrend rather than a continuation. The stock's beta of 0.787 suggests it is less volatile than the market, which is unusual given the recent sharp moves, but the low beta may reflect the stock's historical stability. Key support lies at the 52-week low of $71.75, while resistance is at the 52-week high of $200.68. A breakout above $200.68 would signal a full recovery and potential new highs, while a breakdown below $71.75 would indicate renewed weakness. The current price is 98% above the low, suggesting strong support has been established.
Beta
0.79
0.79x market volatility
Max Drawdown
-61.5%
Largest decline past year
52-Week Range
$72-$201
Price range past year
Annual Return
-26.6%
Cumulative gain past year
| Period | CVLT Return | S&P 500 |
|---|---|---|
| 1m | -14.3% | +1.6% |
| 3m | +18.6% | +4.1% |
| 6m | +37.2% | +6.8% |
| 1y | -26.6% | +16.3% |
| ytd | -3.4% | +8.6% |
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CVLT Fundamental Analysis
Revenue is growing steadily, with the most recent quarter (Q4 FY2026 ending March 31, 2026) reporting $311.7 million, up 13.3% year-over-year. This marks an acceleration from the prior quarter's $313.8 million (which included a 19.5% YoY growth) and a clear uptrend from $275.0 million in the year-ago period. The growth is driven by subscription revenue of $207.6 million (66.6% of total), while perpetual licenses declined to $10.1 million, reflecting the successful transition to a recurring model. The company is profitable, with net income of $14.6 million in Q4 FY2026 and a trailing twelve-month net income of $70.7 million. Gross margin remains strong at 80.6% in Q4, consistent with the 80-82% range over the past year, indicating stable pricing and cost management. Operating margin improved to 11.3% in Q4 from 6.3% in Q3, showing operating leverage as revenue scales. The balance sheet is healthy, with $900.0 million in cash and cash equivalents at the end of Q4, and a current ratio of 1.95, indicating ample liquidity. Free cash flow (TTM) was $237.2 million, representing a FCF yield of 6.9% based on the current market cap. Debt-to-equity is 122.4%, but this is elevated due to a recent debt issuance; however, the company has strong cash flow to service debt, with an interest coverage ratio of 24.6x. ROE is 9.4%, reflecting solid returns on equity.
Quarterly Revenue
$311692000.0B
2026-03
Revenue YoY Growth
+13.3%
YoY Comparison
Gross Margin
80.6%
Latest Quarter
Free Cash Flow
$237151000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CVLT Overvalued?
Since net income is positive (TTM net income of $70.7 million), the primary valuation metric is the P/E ratio. The trailing P/E is 48.4x, while the forward P/E is 23.6x, implying the market expects significant earnings growth. The gap between trailing and forward P/E suggests analysts anticipate a doubling of earnings over the next year, which is aggressive but supported by the company's growth trajectory. Compared to the software-application industry average P/E of approximately 35x (based on sector data), CommVault's trailing P/E of 48.4x represents a 38% premium. However, the forward P/E of 23.6x is below the industry average, indicating that the premium is justified by expected growth. The PEG ratio is -6.5, which is negative due to negative earnings growth in the past, but this metric is less relevant given the recent turnaround. Historically, the stock's P/E has ranged from 8.7x (Q4 2024) to 143x (Q2 2026), with the current trailing P/E of 48.4x near the middle of this range. The forward P/E of 23.6x is near the lower end of the historical band, suggesting that if the company delivers on growth expectations, the stock could be undervalued relative to its own history.
PE
48.4x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 9x~200x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
32.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: CommVault's debt-to-equity ratio of 122.4% is elevated, though interest coverage of 24.6x provides comfort. The company's net income of $70.7 million TTM is modest relative to its $3.4 billion market cap, resulting in a trailing P/E of 48.4x that leaves little room for earnings disappointments. Revenue concentration in subscription (66.6%) is a positive shift, but the transition from perpetual licenses could cause short-term volatility in reported revenue growth. Operating margin, while improving to 11.3%, is still below the industry average for mature software companies, indicating that scalability is still in progress.
Market & Competitive Risks: The stock's beta of 0.787 suggests lower market correlation, but the 52-week range of $71.75 to $200.68 shows high idiosyncratic volatility. The software-application industry is highly competitive, with players like Veeam and Rubrik offering similar data protection solutions. Valuation risk is significant: the trailing P/E of 48.4x is a 38% premium to the industry average, and any slowdown in growth could lead to multiple compression. The wide analyst target spread ($100 to $200) reflects uncertainty about competitive positioning and market share gains.
Worst-Case Scenario: A combination of decelerating subscription growth, margin pressure from increased competition, and a macroeconomic downturn could cause the stock to retest its 52-week low of $71.75. This would represent a 49.6% decline from the current price of $142.31. The bear-case analyst target of $100.00 implies a 29.7% downside, but a more severe scenario could see the stock fall to $71.75 if earnings disappoint significantly and the market re-rates the stock to a lower multiple.