CommVault Systems (CVLT) AI Stock Analysis

• Market Cap: $3.52B
• Dividend Yield: N/A
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 77.7
• Beta (1Y): 1.21
• Revenue Growth: 22.02%
• EPS Growth: -55.25%
• Country: US
• Employees: 3,300
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 1.17
• Shares Outstanding: 43,974,390
• 10 Day Avg. Volume: 1,068,713
• 30 Day Avg. Volume: 1,025,775
• PEG Ratio: -1.66
• Price to Book (P/B): 21.28
• Price to Sales (P/S): 6.95
• P/FCF Ratio: 33.97
• Enterprise Value/Market Cap: 0.98
• Enterprise Value/Revenue: 3.01
• Enterprise Value/Gross Profit: 3.70
• Enterprise Value/Ebitda: 31.32
• 1Y Price Target: $143.09
• Price Target Upside: 78.57% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 13
• EPS Forecast (FY): 4.19
• Revenue Forecast (FY): $1.16B

• Rating: 57 Neutral
• Price Target: $83.00 ▲(3.58% Upside)
• Action: Downgraded Date: 01/28/26
• Date: Action: Downgraded 01/28/26

The score is held back primarily by the sharp increase in balance-sheet leverage and clear technical weakness (price far below major moving averages with negative MACD). Offsetting factors include solid profitability and cash generation, and a notably positive earnings call with raised guidance and margin outlook; valuation remains demanding with a high P/E and no dividend yield.

Positive Factors

Subscription & SaaS ARR growth

Steady, high single- to double-digit ARR growth and a rising SaaS mix create a more durable recurring revenue base. Higher subscription ARR (now the majority of ARR) increases revenue visibility, supports upsell/land-and-expand economics, and reduces reliance on one-time term software transactions.

High gross and operating margins

Sustained ~80% gross margins and near-20% non‑GAAP EBIT margins indicate strong software economics and operating leverage. Margin durability supports reinvestment in product, R&D and go-to-market while enabling consistent cash generation even as SaaS mixes shift over time.

Solid cash generation

Consistent operating and free cash flow that closely tracks earnings provides funding for R&D, M&A optionality and capital returns. Strong cash conversion underpins the company's ability to sustain buybacks and investments without immediate reliance on external financing.

Negative Factors

Elevated leverage

A materially higher leverage profile reduces financial flexibility and increases solvency risk if growth or margins slow. The thin equity base amplifies returns but leaves less cushion for cyclical shocks, limiting ability to absorb weaker operating cash flow or pursue aggressive M&A without raising cost of capital.

Margin compression versus prior year

Year-over-year margin deterioration weakens earnings quality and reduces the buffer for reinvestment or cyclical downturns. If margin pressures persist, free cash flow and investment capacity could be constrained, making long-term targets harder to sustain despite revenue growth.

Quarter-to-quarter ARR and cash timing variability

Material timing-driven swings in receivables, DSO and quarter closings create unpredictability in cash flow and ARR recognition. Persistent deal-timing and a shift toward lower‑ASP SaaS landings can dilute near-term ARR per customer and complicate forecasting and capital allocation over the coming months.

CommVault Systems Business Overview & Revenue Model

Company Description

Commvault Systems, Inc. provides data protection and information management software applications and related services in the United States and internationally. The company offers Commvault Backup and Recovery, a backup and recovery solution; Commvault Disaster Recovery, a replication and disaster recovery solution; and Commvault Complete Data Protection, a data protection solution. It also provides Commvault HyperScale X, an easy-to-deploy scale-out solution; Commvault Distributed Storage Platform that offers software-defined storage built on a hyperscale architecture; Metallic Cloud Storage service, which is the easy button to adopt secure and scalable cloud storage; and Metallic Software-as-a-Service. In addition, the company provides technology and business consulting, education, and remote managed services. Further, it sells appliances that integrate the software with hardware for use in a range of business needs and use cases; and offers professional and customer support services that include data management-as-a-service under the Metallic brand. The company sells its products and services directly through its sales force, and indirectly through its network of distributors, value-added resellers, systems integrators, corporate resellers, and original equipment manufacturers to large enterprises, small and medium sized businesses, and government agencies. It supports customers in a range of industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities, and energy. Commvault Systems, Inc. was founded in 1988 and is headquartered in Tinton Falls, New Jersey.

How the Company Makes Money

Commvault primarily makes money by licensing and subscribing its data protection and cyber resilience software and related services to business and government customers. Key revenue streams include: - Subscription / term software revenue: Customers pay recurring fees (often annually or multi‑year) for the right to use Commvault software, commonly priced based on capacity, workloads, or protected environments depending on contract structure. This recurring model is a core driver of revenue and renewals. - Support and maintenance / customer support services: Ongoing support, updates, and technical assistance tied to deployed software typically generate recurring revenue through maintenance and support arrangements. - Professional services: Implementation, migration, configuration, advisory, and training services provided directly by Commvault can generate services revenue, often connected to initial deployments or major expansion projects. Routes to market and ecosystem factors that contribute to earnings: - Channel partners and resellers: Commvault commonly sells through partner ecosystems (e.g., value‑added resellers, systems integrators, and managed service providers) that influence deal flow and customer reach. - Cloud and platform integrations: Compatibility and integrations with major cloud providers and infrastructure platforms help drive adoption in hybrid and multi‑cloud deployments; any specific commercial partnership terms or revenue-sharing arrangements are null. Other monetization factors: - Expansion and upsell: Revenue can grow within existing customers as protected data volumes increase or as customers add modules/capabilities (e.g., additional recovery, security, or management features) to extend protection to more workloads. Specific customer concentration details, pricing metrics, or named partnership economics: null.

CommVault Systems Financial Statement Overview

Summary

Operations are profitable and cash-generative (TTM gross margin ~81%, net margin ~7.6%, operating cash flow ~$189M and free cash flow ~$181M with good cash conversion), but the balance sheet is a major risk with sharply higher leverage (debt-to-equity ~4.24). Margins also compressed versus FY2024, and free cash flow declined year over year (~-13%).

Income Statement

TTM (Trailing-Twelve-Months) revenue is about $1.15B with modest growth (~4.7%), and profitability is positive with ~81% gross margin and ~7.6% net margin. Results show a clear turnaround from losses in FY2021 and FY2023 to solid profitability in FY2024–TTM. The main weakness is margin compression versus FY2024 (net margin down from ~20% to mid-single digits and EBIT margin down to ~6%), suggesting earnings quality is less robust than last year despite higher revenue.

Balance Sheet

The TTM (Trailing-Twelve-Months) balance sheet shows a sharp increase in leverage, with debt-to-equity at ~4.24 (debt ~$919M vs. equity ~$217M), which materially raises financial risk versus prior years when leverage was very low. While return on equity is strong (~31%), it is amplified by the much smaller equity base, making the capital structure more aggressive and less resilient if profitability softens.

Cash Flow

TTM (Trailing-Twelve-Months) cash generation is solid with operating cash flow of ~$189M and free cash flow of ~$181M, and free cash flow is closely tracking net income (~0.96x), indicating good earnings-to-cash conversion. The primary drawback is that free cash flow declined year over year (about -13%), pointing to some near-term pressure on cash generation even as the business remains cash generative.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.15B	995.62M	839.25M	784.59M	769.59M	723.47M
Gross Profit	934.15M	816.58M	687.64M	649.19M	655.73M	614.10M
EBITDA	110.41M	90.66M	90.56M	-4.57M	54.47M	-5.36M
Net Income	87.00M	76.11M	168.91M	-35.77M	33.62M	-30.95M
Balance Sheet
Total Assets	2.04B	1.12B	943.91M	792.60M	827.92M	914.20M
Cash, Cash Equivalents and Short-Term Investments	1.03B	302.10M	312.75M	287.78M	267.51M	397.24M
Total Debt	950.47M	10.95M	12.09M	12.78M	16.05M	22.89M
Total Liabilities	1.82B	793.14M	665.83M	606.50M	572.09M	520.17M
Stockholders Equity	216.73M	325.12M	278.08M	186.10M	255.83M	394.03M
Cash Flow
Free Cash Flow	181.48M	203.63M	199.71M	167.05M	173.27M	115.78M
Operating Cash Flow	189.45M	207.38M	203.80M	170.29M	177.18M	123.95M
Investing Cash Flow	-5.86M	-70.40M	-5.52M	-5.29M	-24.44M	35.47M
Financing Cash Flow	573.36M	-147.82M	-170.58M	-135.58M	-276.09M	-74.74M

CommVault Systems Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 80.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CVLT, the sentiment is Negative. The current price of 80.13 is below the 20-day moving average (MA) of 85.52, below the 50-day MA of 97.47, and below the 200-day MA of 146.78, indicating a bearish trend. The MACD of -4.36 indicates Negative momentum. The RSI at 34.35 is Neutral, neither overbought nor oversold. The STOCH value of 15.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CVLT.

CommVault Systems Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEGA	71 Outperform	$7.24B	25.92	60.07%	0.16%	17.00%	120.21%
SRAD	70 Outperform	$5.63B	63.09	10.31%	―	18.99%	66.43%
MNDY	67 Neutral	$3.82B	63.93	9.88%	―	28.62%	186.67%
ESTC	63 Neutral	$5.73B	224.68	-9.44%	―	16.98%	-265.85%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
GTLB	60 Neutral	$3.81B	-103.64	-6.24%	―	27.35%	18.18%
CVLT	57 Neutral	$3.52B	77.74	31.15%	―	22.02%	-55.25%