Microvast Holdings announces departure of chief financial officer
On Monday, DA Davidson reiterated its Buy rating on CommVault Systems (NASDAQ:CVLT) with a steady price target of $195.00. The firm’s analyst, Rudy Kessinger, highlighted that the recent decline in the company’s stock price offers an appealing entry point for investors who may have previously felt they missed out. This view aligns with broader market sentiment, as InvestingPro data shows seven analysts have recently revised their earnings estimates upward, with the company maintaining a "GREAT" financial health score. Kessinger’s stance is based on the belief that CommVault can sustain mid-to-high teens annual recurring revenue (ARR) growth for at least the next few years. He also sees the potential for this growth to accelerate beyond 20% year-over-year.
Kessinger noted that organic ARR growth at constant currency for CommVault has increased from 15% year-over-year in Q4 fiscal year 2024 to 18% in Q3 fiscal year 2025. This growth is attributed to factors such as rising momentum in Software (ETR:SOWGn) as a Service (SaaS), contributions from Cyber Resilience, and other elements. The company’s strong execution is reflected in its impressive 81.95% gross profit margins and 15.19% revenue growth over the last twelve months. According to the analyst, CommVault’s shares have experienced approximately a 15% pullback from their all-time high, which now values the company at around 5.8 times its enterprise value to calendar year 2026 revenue (EV/CY26 Rev) or approximately 26.5 times its enterprise value to calendar year 2026 free cash flow (EV/CY26 FCF).
The analyst further compared CommVault’s valuation to its peers, pointing out that similar SaaS companies with comparable free cash flow margins are trading at about 7.3 times EV/CY26 Rev or roughly 30 times EV/CY26 FCF. This places CommVault at a 15-20% discount to its mid-to-high teens growth SaaS peers, suggesting that the stock is undervalued in Kessinger’s assessment. However, InvestingPro’s Fair Value analysis suggests the stock may be overvalued at current levels, presenting investors with an interesting valuation puzzle.
CommVault Systems specializes in data protection and information management software applications, providing solutions that enable businesses to protect, manage, and access data. The company’s suite of products has been designed to work across various cloud and on-premises environments, catering to the growing demand for data security and management. For a comprehensive analysis of CommVault’s business model, growth metrics, and valuation, access the detailed Pro Research Report available exclusively on InvestingPro, along with 15+ additional ProTips and advanced financial metrics.
In other recent news, Commvault reported its third-quarter 2024 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.94, compared to the forecasted $0.87. The company also exceeded revenue expectations, reaching $263 million against an anticipated $245.93 million, marking a 21% year-over-year increase. Subscription revenue saw notable growth, rising by 39% to $158 million, supported by the addition of over 1,000 new subscription customers. In a strategic move, Commvault appointed Ha Hoang as its new Chief Information Officer, who brings extensive experience in cloud strategy and SaaS optimization. Her role will focus on leading the company’s cloud, security, and AI technology initiatives. Despite these positive developments, Commvault’s stock experienced a decline, which might be attributed to broader market conditions. Analyst firms have noted the company’s strong operational performance and strategic focus on expanding subscription services. Looking ahead, Commvault expects fiscal 2025 total annual recurring revenue (ARR) growth of 19-20%, with subscription ARR anticipated to increase by 28-30%.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.