Coveo Solutions (CVO) AI Stock Analysis

• Market Cap: C$502.05M
• Dividend Yield: N/A
• Average Volume (3M): 173.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.48
• 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: 54,375,874
• 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: 88.74% 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$5.50 ▲(5.57% 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 (~78–81%) indicate a scalable, high‑margin SaaS model. Durable unit economics support reinvestment in R&D and sales while protecting cash flow as revenue grows, making profitability easier to reach once operating leverage is achieved.

Strong Cash & Low Leverage

A large cash balance and minimal leverage provide a durable financial cushion to fund growth, absorb one‑time charges, and execute buybacks. This conserves optionality, lowers refinancing risk, and supports the company’s path to adjusted breakeven and positive operating cash flow.

Record Bookings & Customer Expansion

Record bookings and meaningful large‑account expansions reflect strong product-market fit and customer stickiness. High net expansion (top customers ~150% 3‑yr) and recent large deals create durable recurring revenue growth and reduce churn sensitivity.

Negative Factors

Ongoing Net Losses

Despite margin and cash improvements, the company remains unprofitable with a ~-22% net margin and negative returns. Continued losses pressure equity value, require strict cash stewardship to avoid future dilution, and mean sustained execution is needed to deliver durable profitability.

Product Deprecation & Contract Sensitivity

Deprecation of Qubit removes a legacy revenue stream, forcing growth to rely solely on Coveo Core. Combined with sensitivity to individual contract renegotiations (NER fell to 105% due to one deal), this heightens revenue concentration and makes near‑term growth dependent on Core adoption and upsells.

Adjusted EBITDA Volatility & One‑time Costs

Adjusted EBITDA has swung versus prior year and included material one‑time charges, highlighting earnings volatility. Historical inconsistency in operating/free cash flow increases execution risk for sustained positive cash generation and predictable margin expansion.

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 generates revenue primarily through a subscription-based model, offering various licensing options for its software solutions. Key revenue streams include recurring subscription fees from clients who utilize its cloud-based platform, as well as professional services such as implementation, training, and ongoing support. The company also benefits from strategic partnerships with technology providers and integrators, enhancing its market reach and enabling cross-selling opportunities. Additionally, Coveo may engage in performance-based pricing arrangements, where fees are tied to the success metrics achieved by their clients using Coveo's solutions.

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: 5.21
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 5.21 is below the 20-day moving average (MA) of 5.81, below the 50-day MA of 6.41, and below the 200-day MA of 7.34, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 32.79 is Neutral, neither overbought nor oversold. The STOCH value of 7.09 is Positive, 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$2.81B	43.05	2.88%	―	-9.05%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CVO	54 Neutral	C$502.05M	-16.02	-18.09%	―	12.20%	-8.46%
MTLO	45 Neutral	C$2.92M	-0.41	―	―	-13.42%	-126.00%
PLUR	45 Neutral	C$11.81M	-3.84	―	―	17.18%	79.56%

Coveo Solutions Corporate Events

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.

Coveo Announces CFO Transition and Affirms 2026 Guidance

Coveo announced the transition of its Chief Financial Officer, with Brandon Nussey stepping down for a new career opportunity, and Karine Hamel taking over as Interim CFO. The company affirmed its Q3 and Fiscal Year 2026 guidance, highlighting strong customer demand for its AI-powered solutions and continued business momentum.

The most recent analyst rating on (TSE:CVO) stock is a Hold with a C$6.00 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.