Coveo Solutions (CVO) AI Stock Analysis

• Market Cap: C$451.98M
• Dividend Yield: N/A
• Average Volume (3M): 173.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.57
• Revenue Growth: 12.20%
• EPS Growth: -8.46%
• Country: CA
• Employees: 743
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.11
• Shares Outstanding: 53,777,240
• 10 Day Avg. Volume: 192,042
• 30 Day Avg. Volume: 173,021
• PEG Ratio: 0.69
• Price to Book (P/B): 2.91
• Price to Sales (P/S): 2.77
• P/FCF Ratio: 38.72
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$9.83
• Price Target Upside: 103.94% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): -0.33
• Revenue Forecast (FY): C$148.34M

• Rating: 54 Neutral
• Price Target: C$5.00 ▲(3.73% Upside)
• Action: Reiterated Date: 02/01/26
• Date: Action: Reiterated 02/01/26

The score is driven primarily by improving fundamentals (high gross margins, positive free cash flow, low leverage) but held back by continued net losses and negative returns. Technicals are weak with the stock trading below major moving averages, and valuation is constrained by negative earnings. The latest earnings call was constructive with reaffirmed guidance and improving cash/EBITDA outlook, partially offset by near-term revenue headwinds from Qubit deprecation and a softer sequential Q4 guide.

Positive Factors

High gross margins

Sustained high gross and product margins reflect a scalable SaaS cost structure and differentiated technology. These margins provide durable operating leverage as revenue grows, enabling reinvestment in R&D and sales while preserving cash generation potential even through growth phases.

Positive cash flow and strong liquidity

Positive operating and free cash flow together with a sizable cash balance and low/no debt give Coveo runway to invest, fund product launches, and weather cyclical headwinds. This balance sheet optionality reduces refinancing risk and supports strategic choices over the medium term.

Enterprise bookings and account expansion

Record subscription bookings and multi-year expansion among top accounts indicate strong product stickiness and upsell capacity. Large enterprise wins and high net expansion rates suggest durable revenue retention and growth from existing customers, strengthening long-term ARR scalability.

Negative Factors

Ongoing net losses

Despite improving margins and cash, the company still posts negative operating and net income with a roughly -22% net margin. Persistent losses mean profitability is not yet proven; sustained path to positive net income must materialize to convert high-margin economics into durable shareholder returns.

Low cash conversion and history of variability

Although nominal operating cash is positive, conversion is low (~3% of revenue) and cash flow has swung over time. Low, inconsistent cash conversion implies revenue growth may not reliably translate to free cash flow, limiting resilience during slower demand periods and constraining reinvestment capacity.

Product deprecation reducing revenue base

The full deprecation of Qubit eliminates a revenue stream and forces the business to rely solely on Coveo Core to replace that volume. Structural product consolidation increases near-term revenue volatility and requires successful migration/upsell for sustainable top-line growth.

Coveo Solutions Business Overview & Revenue Model

Company Description

Coveo 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 Money

Coveo primarily makes money by selling access to its software platform on a subscription basis (software-as-a-service), where customers pay recurring fees to use Coveo’s search, recommendation, and personalization capabilities in production. Revenue is typically tied to contractual subscription commitments (often multi-year) and may scale based on factors such as the number of users, query or usage volumes, and the specific product modules/features customers license (exact pricing mechanics vary by contract). In addition to subscriptions, Coveo earns professional services and other non-recurring revenue from implementation, configuration, integration, and advisory services that help customers deploy and optimize the platform. A further contributor can be ecosystem/channel motion through technology alliances and systems integrators that implement Coveo as part of broader digital transformation programs; however, specific partnership terms and their direct revenue contribution are null.

Coveo Solutions Financial Statement Overview

Summary

Strong gross margins (~77%) and positive TTM operating/free cash flow ($3.4M/$2.3M) support improving fundamentals, and leverage is low (debt-to-equity ~0.17). However, operating and net income remain negative (net margin ~-22%) with negative returns and declining equity, so profitability durability is still unproven.

Income Statement

TTM (Trailing-Twelve-Months) revenue is $144.8M with an attractive gross margin (~77%), showing solid product economics. However, profitability remains the key issue: operating profit and net income are still negative (net margin ~-22%), indicating the cost structure is not yet scaled to support sustained earnings. Reported revenue growth is strong in TTM, but the multi-year picture also shows ongoing losses, so the earnings trajectory is improving but not yet convincing.

Balance Sheet

Leverage looks manageable with low debt relative to equity (debt-to-equity ~0.17 in TTM (Trailing-Twelve-Months)), which reduces financial risk versus many peers. That said, equity has declined versus prior annual periods and returns on equity remain negative, reflecting continued losses and weaker value creation for shareholders despite a relatively clean debt load.

Cash Flow

Cash generation is a relative bright spot: TTM (Trailing-Twelve-Months) operating cash flow ($3.4M) and free cash flow ($2.3M) are positive, with strong free cash flow growth versus the prior period. Still, cash conversion is modest versus revenue (operating cash flow is only ~3% of revenue), and cash flow has been inconsistent historically (including negative operating/free cash flow in earlier years), so durability through cycles remains a watch item.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2022	Mar 2021
Income Statement
Total Revenue	144.78M	133.27M	126.09M	112.00M	86.49M	64.86M
Gross Profit	111.90M	104.88M	98.45M	85.33M	65.03M	48.45M
EBITDA	-8.69M	-5.06M	-12.20M	-30.32M	249.60M	-468.47M
Net Income	-32.56M	-13.75M	-23.61M	-39.73M	418.28M	-600.02M
Balance Sheet
Total Assets	215.30M	230.36M	275.88M	308.82M	345.50M	194.04M
Cash, Cash Equivalents and Short-Term Investments	100.81M	124.75M	166.59M	198.45M	223.07M	131.87M
Total Debt	16.05M	7.46M	9.04M	10.87M	13.09M	209.84M
Total Liabilities	118.67M	103.45M	97.36M	90.28M	90.06M	1.19B
Stockholders Equity	96.63M	126.91M	178.52M	218.53M	255.44M	-999.08M
Cash Flow
Free Cash Flow	2.26M	9.54M	3.08M	-7.85M	-37.57M	2.19M
Operating Cash Flow	3.35M	11.07M	4.20M	-6.26M	-35.42M	5.78M
Investing Cash Flow	-1.47M	-1.53M	-1.12M	-2.27M	36.62M	30.71M
Financing Cash Flow	-21.17M	-50.81M	-35.59M	-2.43M	163.40M	2.18M

Coveo Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 4.82
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CVO, the sentiment is Negative. The current price of 4.82 is below the 20-day moving average (MA) of 5.59, below the 50-day MA of 6.23, and below the 200-day MA of 7.29, indicating a bearish trend. The MACD of -0.31 indicates Positive momentum. The RSI at 34.39 is Neutral, neither overbought nor oversold. The STOCH value of 21.60 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CVO.

Coveo Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BB	65 Neutral	C$2.75B	43.05	3.01%	―	-9.05%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CVO	54 Neutral	C$451.98M	-16.02	-28.39%	―	12.20%	-8.46%
MTLO	45 Neutral	C$2.92M	-0.41	―	―	-13.42%	-126.00%
PLUR	45 Neutral	C$11.42M	-3.84	286.87%	―	17.18%	79.56%

Coveo Solutions Corporate Events

Bell and Coveo Forge Sovereign AI Alliance to Power Canada’s Public Sector

Bell and Coveo have formed a strategic sovereign AI partnership that integrates the Coveo AI-Relevance Platform into Bell’s AI Fabric to serve Canadian federal and provincial governments and regulated industries. The collaboration aims to modernize citizen services and enhance workforce productivity by delivering secure, compliant AI solutions that keep data and computing operations within Canada under domestic law.

The deal expands both companies’ roles in Canada’s AI ecosystem, leveraging Bell’s fibre network, data centres and integration unit Ateko alongside Coveo’s search, generative and agentic capabilities. By emphasizing data sovereignty and responsible AI governance, the partnership is positioned to strengthen Canada’s digital infrastructure, support AI adoption at scale and reinforce the country’s leadership in sovereign AI for public sector and regulated markets.

The most recent analyst rating on (TSE:CVO) stock is a Hold with a C$5.00 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.

Coveo Partners with Government of Canada to Modernize Public Services Using AI

Coveo Solutions and the Government of Canada have signed a Memorandum of Understanding to integrate AI-powered technologies into public service operations. This partnership aims to modernize government processes, improve service delivery to Canadians, and strengthen the country’s digital sovereignty while driving productivity and supporting domestic innovation.

The most recent analyst rating on (TSE:CVO) stock is a Buy with a C$13.00 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.