Coveo Solutions (CVO) AI Stock Analysis

• Market Cap: C$689.34M
• Dividend Yield: N/A
• Average Volume (3M): 173.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.34
• Revenue Growth: 12.20%
• EPS Growth: -8.46%
• Country: CA
• Employees: 743
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.07
• Shares Outstanding: 54,974,346
• 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$11.25
• Price Target Upside: 59.12% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: C$7.00 ▼(-0.99% Downside)

Coveo Solutions' overall stock score is primarily influenced by its financial performance and technical analysis. The company shows strong revenue growth and efficient cost management, but struggles with profitability and cash flow generation. Technical indicators suggest short-term bullish momentum, but longer-term trends are bearish. The valuation is negatively impacted by the company's unprofitability and lack of dividend yield. The earnings call provided some positive insights, but these were not enough to significantly alter the overall score.

Positive Factors

Revenue Growth

Coveo's strong revenue growth, particularly in SaaS and total revenue, indicates robust demand for its solutions and effective market penetration, supporting long-term business expansion.

Generative AI Expansion

The significant growth in generative AI solutions showcases Coveo's innovation and leadership in AI technology, positioning it well for future market opportunities and competitive advantage.

Commerce Segment Success

The rapid growth in the commerce segment underscores Coveo's ability to capitalize on e-commerce trends, enhancing its revenue base and strategic market positioning.

Negative Factors

Profitability Challenges

Persistent profitability issues, with negative profit and EBIT margins, could hinder Coveo's ability to reinvest in growth and maintain financial health over the long term.

Cash Flow Concerns

Declining free cash flow growth suggests potential liquidity issues, which may affect Coveo's operational flexibility and ability to fund future initiatives.

Salesforce Contract Renegotiation

The renegotiation with Salesforce, impacting NER, highlights potential challenges in client retention and revenue predictability, affecting long-term financial stability.

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

Coveo Solutions demonstrates strong revenue growth and gross profit margins, which are positive indicators for future potential. However, the company faces challenges with profitability and return on equity, which need to be addressed to enhance financial health. The balance sheet remains stable with low leverage, and cash flow improvements are promising, but further alignment with profitability is needed.

Income Statement

Coveo Solutions shows a consistent revenue growth trend with a TTM growth rate of 2.5%. Gross profit margins are strong at approximately 78%, indicating efficient cost management. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins, reflecting ongoing operational challenges.

Balance Sheet

The company's balance sheet is stable with a low debt-to-equity ratio of 0.06, suggesting conservative leverage. However, the negative return on equity indicates that the company is not generating sufficient returns on shareholders' investments, which could be a concern for investors.

Cash Flow

Coveo Solutions has shown significant improvement in free cash flow growth, with a TTM growth rate of 44.8%. The operating cash flow to net income ratio is positive, indicating some level of cash generation from operations. However, the free cash flow to net income ratio suggests that cash flow is not yet fully aligned with profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	155.28M	133.27M	126.09M	112.00M	86.49M	64.86M
Gross Profit	119.60M	104.88M	98.45M	85.33M	65.03M	48.45M
EBITDA	-7.98M	-5.06M	-12.20M	-30.32M	249.60M	-468.47M
Net Income	-23.37M	-13.75M	-23.61M	-39.73M	418.28M	-600.02M
Balance Sheet
Total Assets	300.08M	230.36M	275.88M	308.82M	345.50M	194.04M
Cash, Cash Equivalents and Short-Term Investments	150.58M	124.75M	166.59M	198.45M	223.07M	131.87M
Total Debt	14.36M	7.46M	9.04M	10.87M	13.09M	209.84M
Total Liabilities	142.55M	103.45M	97.36M	90.28M	90.06M	1.19B
Stockholders Equity	157.53M	126.91M	178.52M	218.53M	255.44M	-999.08M
Cash Flow
Free Cash Flow	-2.88M	9.54M	3.08M	-7.85M	-37.57M	2.19M
Operating Cash Flow	-1.22M	11.07M	4.20M	-6.26M	-35.42M	5.78M
Investing Cash Flow	-1.67M	-1.53M	-1.12M	-2.27M	36.62M	30.71M
Financing Cash Flow	-24.69M	-50.81M	-35.59M	-2.43M	163.40M	2.18M

Coveo Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.07
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• 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 Positive. The current price of 7.07 is above the 20-day moving average (MA) of 6.86, above the 50-day MA of 6.25, and below the 200-day MA of 7.30, indicating a neutral trend. The MACD of 0.24 indicates Negative momentum. The RSI at 58.33 is Neutral, neither overbought nor oversold. The STOCH value of 75.93 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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
STC	56 Neutral	C$223.69M	-29.42	-2.18%	―	-4.34%	31.52%
DND	55 Neutral	C$268.69M	-1.74	―	1.80%	2.47%	19.37%
CVO	54 Neutral	C$689.34M	-22.42	-18.09%	―	12.20%	-8.46%
PLUR	45 Neutral	C$14.56M	-1.47	―	―	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.

Coveo Solutions Surpasses Revenue Guidance with Strong AI and Commerce Growth

Coveo Solutions reported a robust second quarter for fiscal year 2026, with SaaS subscription revenue reaching $35.9 million, surpassing guidance and marking a 15% increase from the previous year. The company’s core platform saw a 17% growth, and its commerce use case, bolstered by an expanding partnership with SAP, remains its fastest-growing segment. Generative AI solutions also showed significant momentum, contributing to over 35% of new business bookings and a 2.5x increase in customer and revenue growth year-over-year. Despite a net loss of $4.4 million, Coveo’s strategic focus on AI and commerce solutions is driving substantial business value and recognition, including the SAP Global Customer Experience Award.

The most recent analyst rating on (TSE:CVO) stock is a Hold with a C$8.50 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.