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CommVault Systems, Inc. (CVLT) Soars to 52-Week High, Time to Cash Out?
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Shares of Commvault Systems (CVLT - Free Report) have been strong performers lately, with the stock up 6.8% over the past month. The stock hit a new 52-week high of $101 in the previous session. Commvault Systems has gained 25.5% since the start of the year compared to the 13.2% move for the Zacks Computer and Technology sector and the 13.3% return for the Zacks Computer - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 30, 2024, Commvault reported EPS of $0.78 versus consensus estimate of $0.73 while it beat the consensus revenue estimate by 4.08%.
For the current fiscal year, Commvault is expected to post earnings of $2.93 per share on $829 million in revenues. This represents a 14.84% change in EPS on a 5.66% change in revenues. For the next fiscal year, the company is expected to earn $3.18 per share on $884.9 million in revenues. This represents a year-over-year change of 8.5% and 6.74%, respectively.
Valuation Metrics
Commvault may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Commvault has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 34.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 31X. On a trailing cash flow basis, the stock currently trades at 67X versus its peer group's average of 26.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Commvault currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Commvault fits the bill. Thus, it seems as though Commvault shares could have potential in the weeks and months to come.
How Does CVLT Stack Up to the Competition?
Shares of CVLT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Pegasystems Inc. (PEGA - Free Report) . PEGA has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. Pegasystems Inc. beat our consensus estimate by 65.42%, and for the current fiscal year, PEGA is expected to post earnings of $2.77 per share on revenue of $1.5 billion.
Shares of Pegasystems Inc. have gained 1.7% over the past month, and currently trade at a forward P/E of 23.78X and a P/CF of 31.15X.
The Computer - Software industry is in the top 19% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CVLT and PEGA, even beyond their own solid fundamental situation.
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CommVault Systems, Inc. (CVLT) Soars to 52-Week High, Time to Cash Out?
Shares of Commvault Systems (CVLT - Free Report) have been strong performers lately, with the stock up 6.8% over the past month. The stock hit a new 52-week high of $101 in the previous session. Commvault Systems has gained 25.5% since the start of the year compared to the 13.2% move for the Zacks Computer and Technology sector and the 13.3% return for the Zacks Computer - Software industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on January 30, 2024, Commvault reported EPS of $0.78 versus consensus estimate of $0.73 while it beat the consensus revenue estimate by 4.08%.
For the current fiscal year, Commvault is expected to post earnings of $2.93 per share on $829 million in revenues. This represents a 14.84% change in EPS on a 5.66% change in revenues. For the next fiscal year, the company is expected to earn $3.18 per share on $884.9 million in revenues. This represents a year-over-year change of 8.5% and 6.74%, respectively.
Valuation Metrics
Commvault may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Commvault has a Value Score of C. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 34.2X current fiscal year EPS estimates, which is a premium to the peer industry average of 31X. On a trailing cash flow basis, the stock currently trades at 67X versus its peer group's average of 26.2X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Commvault currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Commvault fits the bill. Thus, it seems as though Commvault shares could have potential in the weeks and months to come.
How Does CVLT Stack Up to the Competition?
Shares of CVLT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Pegasystems Inc. (PEGA - Free Report) . PEGA has a Zacks Rank of # 2 (Buy) and a Value Score of C, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. Pegasystems Inc. beat our consensus estimate by 65.42%, and for the current fiscal year, PEGA is expected to post earnings of $2.77 per share on revenue of $1.5 billion.
Shares of Pegasystems Inc. have gained 1.7% over the past month, and currently trade at a forward P/E of 23.78X and a P/CF of 31.15X.
The Computer - Software industry is in the top 19% of all the industries we have in our universe, so it looks like there are some nice tailwinds for CVLT and PEGA, even beyond their own solid fundamental situation.