In this photo illustration, the Commvault Systems, Inc. logo is seen displayed on a smartphone screen. (Photo Illustration by Thomas Fuller/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
Commvault Systems (CVLT) shares have decreased by 31% in the past day and are currently priced at $89.13. The sharp drop came after the company’s most recent earnings release. While Commvault reported strong revenue and earnings beats, its forward guidance and growth expectations disappointed investors, who had been pricing in acceleration rather than just in-line forecasts. Concerns about slower near-term growth in subscription revenue and a high valuation multiple also weighed on sentiment, prompting analysts to lower price targets and triggering steep selling pressure.
We believe there is little to worry about with CVLT stock, considering its overall Strong operational performance and financial health. This aligns with the stock’s High valuation, which makes us conclude that it is Fairly Priced.
Below is our evaluation:
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Let’s delve into the details of each of the evaluated factors, but first, for a quick background: With $4.0 Bil in market capitalization, Commvault Systems offers data protection and information management software, alongside integrated hardware appliances and related services through strategic collaborations with leading technology firms globally.
[1] Valuation Appears High
This table illustrates how CVLT is valued compared to the broader market. For additional information, see: CVLT Valuation Ratios
[2] Growth Is Very Strong
- Commvault Systems has experienced an average top-line growth of 11.7% over the past 3 years
- Its revenues have increased by 22% from $898 Mil to $1.1 Bil in the last 12 months
- Additionally, its quarterly revenues rose by 18.4% to $276 Mil in the latest quarter from $233 Mil a year earlier.
This table illustrates how CVLT is growing compared to the broader market. For additional details, see: CVLT Revenue Comparison
[3] Profitability Seems Weak
- CVLT reported an operating income of $86 Mil in the last 12 months, which corresponds to an operating margin of 7.8%
- With a cash flow margin of 19.7%, it produced nearly $216 Mil in operating cash flow during this timeframe
- During the same period, CVLT generated nearly $80 Mil in net income, indicating a net margin of approximately 7.3%
This table illustrates how CVLT’s profitability compares to the broader market. For more information, see: CVLT Operating Income Comparison
[4] Financial Stability Seems Very Strong
- CVLT’s Debt was $908 Mil at the close of the last quarter, while its current Market Cap is $4.0 Bil. This results in a Debt-to-Equity Ratio of 22.9%
- CVLT’s Cash (including cash equivalents) constitutes $1.1 Bil of $1.9 Bil in total Assets. This gives a Cash-to-Assets Ratio of 55.5%
financial stability
Trefis
[5] Downturn Resilience Is Weak
CVLT has performed worse than the S&P 500 index during several economic contractions. We evaluate this based on both (a) the magnitude of the stock decline and (b) the speed of its recovery.
2022 Inflation Shock
- CVLT stock decreased by 39.1% from its peak of $83.87 on 3 September 2021 to $51.08 on 15 September 2022, whereas the S&P 500 saw a peak-to-trough decline of 25.4%.
- Nevertheless, the stock completely rebounded to its pre-crisis peak by 30 January 2024
- Since that time, the stock has climbed to a peak of $195.41 on 18 September 2025 and is currently trading at $89.13
2020 Covid Pandemic
- CVLT stock dropped 46.0% from its peak of $51.55 on 12 February 2020 to $27.83 on 18 March 2020, compared to a peak-to-trough decline of 33.9% for the S&P 500.
- Nevertheless, the stock fully rebounded to its pre-crisis peak by 10 December 2020
2008 Global Financial Crisis
- CVLT stock declined by 65.3% from a high of $22.87 on 6 November 2007 to $7.94 on 20 November 2008, compared to a peak-to-trough decline of 56.8% for the S&P 500.
- Nevertheless, the stock fully recovered to its pre-crisis peak by 18 December 2009
However, the risk isn’t confined to significant market crashes. Stocks can decline even when market conditions are favorable — consider events such as earnings reports, business updates, or changes in outlook. Refer to CVLT Dip Buyer Analyses to observe how the stock has bounced back from sharp declines in the past.
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