CommVault stock retains buy rating, $195 target from DA Davidson

On Monday, DA Davidson reiterated a strong endorsement for CommVault Systems (NASDAQ:CVLT), maintaining a Buy rating and a $195.00 price target. The firm’s stance comes after CommVault’s recent performance, which was highlighted by a robust quarterly report surpassing expectations and an upward revision of future growth forecasts. According to InvestingPro data, the company has demonstrated impressive performance with a 57.84% return over the past year, while maintaining strong gross profit margins of 81.95%. Analyst targets currently range from $147 to $200, suggesting potential upside from current levels.

CommVault’s organic Annual Recurring Revenue (ARR) growth at constant currency (CC) quickened by approximately one percentage point to 18% year-over-year. Notably, the company’s organic New Net ARR (NNARR) at CC increased to $38 million, up from $37 million in the previous quarter. Additionally, the forecast for Fiscal Year 2025 ARR growth was revised upwards from 18% year-over-year to a range of 19-20%, despite significant foreign exchange challenges. InvestingPro analysis reveals the company operates with moderate debt levels and maintains strong cash flows, with 11 additional ProTips available to subscribers.

The resilience of CommVault’s SaaS ARR growth was also underscored, with a year-over-year increase of 59% organically at constant currency, compared to 61% in the last quarter. The organic SaaS NNARR at CC reached $31 million, marking a 43% increase quarter-over-quarter and a 47% rise year-over-year.

DA Davidson’s analyst expressed a bullish view on the stock, advising investors to "aggressively accumulate shares on the weakness," and affirmed CommVault as their top pick for 2025. The analyst’s comments reflect confidence in CommVault’s growth trajectory and its ability to navigate through macroeconomic headwinds while continuing to expand its SaaS offerings.

In other recent news, Commvault Systems reported strong third-quarter earnings for 2024, with earnings per share (EPS) of $0.94, surpassing analyst expectations of $0.87. The company also exceeded revenue forecasts, reaching $263 million, a 21% increase year-over-year, driven by a significant 39% growth in subscription revenue. Despite this positive performance, Commvault’s stock experienced a decline in pre-market trading. In analyst updates, DA Davidson maintained a Buy rating on Commvault with a price target of $195, citing the company’s potential for sustained annual recurring revenue growth in the mid-to-high teens. Additionally, Commvault announced key executive appointments, with Bill O’Connell taking on the role of Chief Security Officer and Ha Hoang as the new Chief Information Officer. These appointments are expected to strengthen the company’s focus on cybersecurity and cloud strategy. The company continues to innovate in cyber resilience, with recent product developments aimed at enhancing data protection and recovery capabilities.

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