tiprankstipranks
Trending News
More News >
Coveo Solutions (TSE:CVO)
TSX:CVO
Canadian Market
Advertisement

Coveo Solutions (CVO) AI Stock Analysis

Compare
205 Followers

Top Page

TSE:CVO

Coveo Solutions

(TSX:CVO)

Rating:67Neutral
Price Target:
C$10.00
▲(10.86%Upside)
Coveo Solutions exhibits strong growth potential facilitated by its AI-driven strategy and robust cash flow management. However, profitability challenges and overbought technical indicators pose risks. The company's partnership expansion with SAP and strong strategic shifts are positive, enhancing its market position.
Positive Factors
Growth Outlook
The growth outlook for Coveo Solutions, Inc. remains strong and is expected to accelerate.
Market Opportunity
Coveo has a large and growing Total Addressable Market (TAM), a robust partner ecosystem, and a seasoned management team, supporting strong organic SaaS revenue growth.
Valuation
Coveo is considered significantly undervalued given its market position, customer list, and high-teens SaaS growth targeted for FY2026.
Negative Factors
EBITDA Guidance
EBITDA guidance is lighter than expected as Coveo is increasing investments to better capitalize on market opportunities.
Guidance
Guidance was in line on SaaS revenue but lighter on EBITDA, as CVO is ramping up investments in order to better capitalize on its market opportunity.
Investment Spending
Coveo is ramping up investments in R&D and sales/marketing to prepare for future growth, indicating stronger demand and better unit economics.

Coveo Solutions (CVO) vs. iShares MSCI Canada ETF (EWC)

Coveo Solutions Business Overview & Revenue Model

Company DescriptionCoveo Solutions Inc. provides applied artificial intelligence (AI) solutions. Its cloud-native, multi-tenant software as a service (SaaS) platform is the intelligence layer that injects search, recommendations, and personalization solutions into digital experiences to provide connected relevance for various-use cases across commerce, service, website, and workplace applications. It serves high tech, healthcare, manufacturing, financial services, and telecommunication industries. Coveo Solutions Inc. has strategic technology partnerships with Adobe, SAP, Salesforce, ServiceNow, Zendesk, Sitecore, AppDirect, and commercetools. The company was incorporated in 2004 and is headquartered in Quebec, Canada.
How the Company Makes MoneyCoveo Solutions makes money primarily through a subscription-based revenue model. The company offers its AI-powered search and recommendation platform as a software-as-a-service (SaaS), where businesses pay recurring fees to access its services. Key revenue streams include subscriptions from various industries such as retail, technology, finance, and telecommunications that utilize Coveo's solutions to enhance their digital customer experiences. The company also generates income from professional services, including implementation, training, and support, which assist clients in maximizing the value of their investment in Coveo's technology. Significant partnerships with technology providers and systems integrators further contribute to the company's earnings by expanding its market reach and offering integrated solutions.

Coveo Solutions Earnings Call Summary

Earnings Call Date:Jul 31, 2025
(Q2-2025)
|
% Change Since: 0.00%|
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
Coveo demonstrated strong financial performance exceeding guidance, with significant growth in new customers and strategic partnerships enhancing their market position. However, challenges remain with maintaining high NER due to budget constraints in the current enterprise environment.
Q2-2025 Updates
Positive Updates
Exceeded Guidance with Strong Financial Performance
Coveo delivered SaaS subscription revenue of $31.2 million, cash flows from operations of $1.4 million, and adjusted EBITDA of $1.5 million, exceeding their guidance for Q2 2025.
Significant New Customer Growth
The second quarter was the best for new logos in the past two years, with a 50% increase in customers using Coveo's relevance augmented generative answering solution over the last 90 days.
Partnership with Major Platforms
Coveo announced new partnerships with Shopify, AWS, and Optimizely, enhancing its market reach and solution offerings.
Strong Performance in Generative AI
Generative AI solutions represented over 25% of new bookings in the quarter, with significant improvements in customer self-service and cost reduction metrics reported by clients like SAP Concur.
Continued Innovation and Product Enhancement
Launched Relevance-Augmented Passage Retrieval API, expanding their TAM and addressing new market segments.
Negative Updates
Challenges with Net Expansion Rate (NER)
NER, excluding the Qubit platform, was 104%, down from 106% in Q1, due to enterprise customers' budget sensitivity and M&A activities.
Impact of Qubit Platform Churn
SaaS revenue for the Qubit platform declined by 51%, with expectations of further churn impacting total revenue.
Budget Sensitivity Among Enterprise Customers
Some enterprise customers continue to be budget sensitive, impacting expansion rates, although efforts are underway to counteract this.
Company Guidance
In the recent earnings call for Coveo's second quarter of fiscal year 2025, the company reported impressive financial performance and exceeded guidance on several key metrics. The SaaS subscription revenue reached $31.2 million, surpassing expectations, with the core Coveo platform contributing $29.9 million, marking an 11% increase from the previous year. The company also achieved $1.4 million in cash flows from operations and improved its adjusted EBITDA to $1.5 million. Coveo's strategy to leverage applied AI and generative AI solutions has shown significant traction, as evidenced by a 50% increase in customers using its relevance-augmented generative answering solution in just 90 days. The company achieved its best quarter for new logo additions in the last two years and maintains a strong financial position with $128.2 million in cash and no debt. Looking forward, Coveo anticipates SaaS subscription revenue for Q3 to be between $31.8 million and $32.3 million, and it remains on track to achieve its annual guidance, expecting to land towards the lower to midpoint of the forecasted range.

Coveo Solutions Financial Statement Overview

Summary
Coveo Solutions exhibits strong revenue growth and robust cash flow management. The company maintains a healthy balance sheet with low leverage. However, ongoing net losses and negative ROE indicate profitability challenges.
Income Statement
70
Positive
Coveo Solutions has shown positive revenue growth over the years, with a revenue growth rate of 5.71% in the latest year. The gross profit margin is robust at 78.69%, indicating strong cost management. However, the company is still operating at a net loss, with a negative net profit margin of -10.32%, and negative EBIT and EBITDA margins, reflecting ongoing challenges in achieving profitability.
Balance Sheet
65
Positive
The company has a healthy equity position, with a high equity ratio of 55.09%. The debt-to-equity ratio stands at a modest 0.06, indicating low leverage. However, the ROE is negative at -10.84% due to net losses, highlighting the need for improved profitability to enhance shareholder returns.
Cash Flow
78
Positive
Coveo Solutions has demonstrated strong cash flow management, with a significant improvement in operating cash flow. The free cash flow growth rate is an impressive 209.72%, and the free cash flow to net income ratio is positive, indicating effective cash generation despite net losses. The operating cash flow to net income ratio is also positive, showing good cash conversion efficiency.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue133.27M126.09M112.00M86.49M64.86M
Gross Profit104.88M98.45M85.33M65.03M48.45M
EBITDA-5.06M-12.20M-30.32M249.60M-468.47M
Net Income-13.75M-23.61M-39.73M418.28M-600.02M
Balance Sheet
Total Assets230.36M275.88M308.82M345.50M194.04M
Cash, Cash Equivalents and Short-Term Investments124.75M166.59M198.45M223.07M131.87M
Total Debt7.46M9.04M10.87M13.09M209.84M
Total Liabilities103.45M97.36M90.28M90.06M1.19B
Stockholders Equity126.91M178.52M218.53M255.44M-999.08M
Cash Flow
Free Cash Flow9.54M3.08M-7.85M-37.57M2.19M
Operating Cash Flow11.07M4.20M-6.26M-35.42M5.78M
Investing Cash Flow-1.53M-1.12M-2.27M36.62M30.71M
Financing Cash Flow-50.81M-35.59M-2.43M163.40M2.18M

Coveo Solutions Technical Analysis

Technical Analysis Sentiment
Positive
Last Price9.02
Price Trends
50DMA
7.68
Positive
100DMA
6.76
Positive
200DMA
6.63
Positive
Market Momentum
MACD
0.38
Negative
RSI
82.83
Negative
STOCH
73.50
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CVO, the sentiment is Positive. The current price of 9.02 is above the 20-day moving average (MA) of 8.24, above the 50-day MA of 7.68, and above the 200-day MA of 6.63, indicating a bullish trend. The MACD of 0.38 indicates Negative momentum. The RSI at 82.83 is Negative, neither overbought nor oversold. The STOCH value of 73.50 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:CVO.

Coveo Solutions Peers Comparison

Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
67
Neutral
C$892.61M-17.77%9.08%37.74%
60
Neutral
C$263.02M-2.67%-1.72%76.81%
55
Neutral
C$751.57M-39.72%0.69%2.47%19.37%
49
Neutral
C$3.08B1.79-63.12%2.61%3.86%-13.78%
$6.48M
47
Neutral
C$15.71M-1525.80%0.55%69.82%
$1.01B30.46-20.44%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:CVO
Coveo Solutions
8.37
2.28
37.44%
TSE:STC
Sangoma Technologies
7.83
1.26
19.18%
FOBIF
Fobi AI
0.01
-0.03
-75.00%
TSE:DND
Dye & Durham
10.81
-2.08
-16.14%
TSE:PLUR
Plurilock Security Inc
0.20
-0.89
-81.65%
TIXT
TELUS International (CDA)
3.68
-0.47
-11.33%

Coveo Solutions Corporate Events

Business Operations and StrategyFinancial Disclosures
Coveo Solutions Reports Strong Start to Fiscal 2026 with AI-Driven Growth
Positive
Jul 31, 2025

Coveo Solutions has reported a robust start to its fiscal year 2026, with a notable reacceleration in growth driven by its core platform and generative AI solutions. The company achieved a 16% growth rate for its core platform and saw generative AI solutions contribute to approximately 50% of new business. Coveo’s strategic relationship with SAP has been significantly expanded, positioning it as a key AI partner and enhancing its market leadership. Despite a net loss of $15.1 million, Coveo’s cash flow from operating activities improved significantly, reflecting strong business momentum and customer adoption across diverse regions and use cases.

The most recent analyst rating on (TSE:CVO) stock is a Buy with a C$10.00 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.

Business Operations and StrategyFinancial Disclosures
Coveo Solutions Reports Record Fourth Quarter Performance and Strategic Shift
Positive
May 20, 2025

Coveo Solutions announced its financial results for the fourth quarter and fiscal year 2025, highlighting the best fourth-quarter new business performance in its history and a significant increase in generative AI customers. The company reported a 6% increase in total revenue to $133.3 million for FY25, with a notable 11% growth in its core platform’s SaaS subscription revenue. Despite a net loss of $13.8 million, Coveo achieved positive cash flows from operating activities of $11.1 million, reflecting a strategic focus on its core platform and the deprecation of the Qubit Platform. This strategic shift is expected to enhance growth and operational efficiency, positioning Coveo for continued innovation and customer excellence in fiscal year 2026.

The most recent analyst rating on (TSE:CVO) stock is a Buy with a C$12.00 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 01, 2025