CommVault Systems: SaaS Mix Shift Masks Strong Fundamentals, Creating Asymmetric Buy Opportunity

CommVault Systems, the Technology sector company, was revisited by a Wall Street analyst yesterday. Analyst Shrenik Kothari from Robert W. Baird maintained a Buy rating on the stock and has a $185.00 price target.

Shrenik Kothari has given his Buy rating due to a combination of factors that, in his view, point to solid fundamentals despite the sharp pullback in CommVault’s share price. He notes that the company delivered robust underlying performance in the quarter, with strong double‑digit growth in subscription revenue, SaaS, and total ARR, even though reported net new ARR came in below prior indications. He attributes the NNARR shortfall mainly to a shift in deal mix—more SaaS “land” deals at lower initial price points and an increase in longer‑duration term contracts—rather than any weakening in demand or sales execution. These structure and mix effects dampen near‑term ARR optics but are tied to attractive total contract values and strategically important wins that should enhance customer lifetime value.

Kothari also highlights that SaaS is becoming a larger share of net new ARR and that changes in net retention metrics are driven by cohort and mix dynamics, not elevated churn, with customers continuing to use and expand the platform within committed spend. Management’s commentary suggests that duration and NRR fluctuations are largely mechanical and should normalize as cohorts mature and expansions catch up. Given this backdrop, he views the current valuation—around 2.5x enterprise value to sales—as dislocated relative to the company’s growth profile and profitability. In his assessment, this creates an appealing, asymmetric risk‑reward setup, supporting a Buy rating on CommVault Systems shares.

Kothari covers the Technology sector, focusing on stocks such as CommVault Systems, JFrog, and Zscaler. According to TipRanks, Kothari has an average return of 21.5% and a 65.45% success rate on recommended stocks.

In another report released yesterday, TipRanks – PerPlexity also upgraded the stock to a Buy with a $146.00 price target.