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CommVault Stock Rises 26% in Six Months: What Should Investors Do?
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CommVault Systems (CVLT - Free Report) shares have surged 26.3% for the trailing six months, outperforming the broader Zacks Computer & Technology sector’s return of 6.5%.
Over the same time frame, it outpaced its industry peers like Autodesk (ADSK - Free Report) and Manhattan Associates (MANH - Free Report) , shares of which have climbed 21% and 12.2%, respectively.
The outperformance of the stock is firmly grounded in the robust adoption of its cloud platform, which is significantly boosting financial performance. Additionally, the company's unwavering commitment to promoting subscription arrangements through term-based software licenses and software-as-a-service (SaaS) offerings is a major driver of revenue growth.
CommVault has consistently showcased impressive financial performance over the past seven quarters. In the second quarter of fiscal 2025, the company's revenues surged approximately 16%, and non-GAAP earnings per share (EPS) jumped nearly 19%. Both the top and bottom lines for CVLT decisively surpassed the Zacks Consensus Estimate.
Encouraged by a stronger-than-anticipated performance in the second quarter, CommVault has updated its guidance for fiscal 2025. The company now expects revenues for fiscal 2025 to be between $952-$957 million, a notable increase from its earlier forecast of $915-$925 million. The Zacks Consensus Estimate for the same is pegged at $956.2 million, suggesting a year-over-year rise of 13.9%.
The consensus mark for fiscal 2025 EPS is $3.44, indicating year-over-year growth of 15.4%. The Zacks Consensus Estimate for the next fiscal year also indicates continued double-digit growth for both revenues and earnings.
Robust Portfolio Boosts CommVault’s Opportunities
CommVault's launch of its cloud cyber resilience platform on Amazon Web Services (“AWS”) marks an important milestone. With this development, AWS customers will gain access to cutting-edge solutions designed to automate data protection, enhance cyber recovery efforts, and simplify the process of restoring cloud applications after a cyber incident. This platform includes CommVault’s widely recognized SaaS offerings, such as Metallic, further reinforcing its capabilities in safeguarding digital assets.
In October 2024, CommVault announced an expanded partnership with Google Cloud, with CommVault Cloud Backup & Recovery for Google Workspace. Set to launch by the end of the year, this innovative solution offers comprehensive, enterprise-level protection for Gmail, Google Drive and Shared Drives. It aims to ensure that vital data remains secure, compliant and easily recoverable.
CommVault’s latest declaration of Cloud Rewind to be now accessible on the Commvault Cloud platform is an important achievement. This special solution gives cloud-first companies a secret weapon to improve their cyber resilience capabilities by integrating cloud-native distributed application recovery and rebuild capabilities from the Appranix acquisition.
Earlier this year, CommVault also acquired Clumio, a leading technology leader in data protection for critical cloud data in AWS. Through this deal, Commvault can leverage Clumio's AWS-focused products to give next-generation AWS-based apps cyber resilience. Among the many clients that Clumio serves are Atlassian (TEAM - Free Report) , Cox Automotive, Duolingo and LexisNexis.
CommVault has also enhanced its offerings by announcing a collaborative cyber readiness solution with Pure Storage that can be extremely helpful in assisting businesses to adhere to strict and changing regulations.
Additionally, CommVault revealed that CommVault Cloud Backup and Recovery for Microsoft 365 now includes Microsoft 365 Backup Storage. Through strategic partnerships with a variety of security partners, including Acante, Dasera, Google Cloud, Splunk, and Wiz, CommVault announced the growth of its cyber and data security ecosystem.
Conclusion: What Should Investors Do?
Innovative product launches and ongoing efforts to differentiate itself in the market through cooperative agreements demonstrate CommVault's tenacity and potential for long-term growth. On the other hand, short-term difficulties, such as macroeconomic uncertainties, can be risky.
Despite the stock's potential for long-term growth, its stretched valuation, as suggested by the Zacks Value Style Score of F, indicates limited upside potential in the near term.
Image: Bigstock
CommVault Stock Rises 26% in Six Months: What Should Investors Do?
CommVault Systems (CVLT - Free Report) shares have surged 26.3% for the trailing six months, outperforming the broader Zacks Computer & Technology sector’s return of 6.5%.
Over the same time frame, it outpaced its industry peers like Autodesk (ADSK - Free Report) and Manhattan Associates (MANH - Free Report) , shares of which have climbed 21% and 12.2%, respectively.
The outperformance of the stock is firmly grounded in the robust adoption of its cloud platform, which is significantly boosting financial performance. Additionally, the company's unwavering commitment to promoting subscription arrangements through term-based software licenses and software-as-a-service (SaaS) offerings is a major driver of revenue growth.
CommVault Systems, Inc. Price and Consensus
CommVault Systems, Inc. price-consensus-chart | CommVault Systems, Inc. Quote
Positive Guidance Indicates CVLT’s Promising Growth
CommVault has consistently showcased impressive financial performance over the past seven quarters. In the second quarter of fiscal 2025, the company's revenues surged approximately 16%, and non-GAAP earnings per share (EPS) jumped nearly 19%. Both the top and bottom lines for CVLT decisively surpassed the Zacks Consensus Estimate.
Encouraged by a stronger-than-anticipated performance in the second quarter, CommVault has updated its guidance for fiscal 2025. The company now expects revenues for fiscal 2025 to be between $952-$957 million, a notable increase from its earlier forecast of $915-$925 million. The Zacks Consensus Estimate for the same is pegged at $956.2 million, suggesting a year-over-year rise of 13.9%.
The consensus mark for fiscal 2025 EPS is $3.44, indicating year-over-year growth of 15.4%. The Zacks Consensus Estimate for the next fiscal year also indicates continued double-digit growth for both revenues and earnings.
Robust Portfolio Boosts CommVault’s Opportunities
CommVault's launch of its cloud cyber resilience platform on Amazon Web Services (“AWS”) marks an important milestone. With this development, AWS customers will gain access to cutting-edge solutions designed to automate data protection, enhance cyber recovery efforts, and simplify the process of restoring cloud applications after a cyber incident. This platform includes CommVault’s widely recognized SaaS offerings, such as Metallic, further reinforcing its capabilities in safeguarding digital assets.
In October 2024, CommVault announced an expanded partnership with Google Cloud, with CommVault Cloud Backup & Recovery for Google Workspace. Set to launch by the end of the year, this innovative solution offers comprehensive, enterprise-level protection for Gmail, Google Drive and Shared Drives. It aims to ensure that vital data remains secure, compliant and easily recoverable.
CommVault’s latest declaration of Cloud Rewind to be now accessible on the Commvault Cloud platform is an important achievement. This special solution gives cloud-first companies a secret weapon to improve their cyber resilience capabilities by integrating cloud-native distributed application recovery and rebuild capabilities from the Appranix acquisition.
Earlier this year, CommVault also acquired Clumio, a leading technology leader in data protection for critical cloud data in AWS. Through this deal, Commvault can leverage Clumio's AWS-focused products to give next-generation AWS-based apps cyber resilience. Among the many clients that Clumio serves are Atlassian (TEAM - Free Report) , Cox Automotive, Duolingo and LexisNexis.
CommVault has also enhanced its offerings by announcing a collaborative cyber readiness solution with Pure Storage that can be extremely helpful in assisting businesses to adhere to strict and changing regulations.
Additionally, CommVault revealed that CommVault Cloud Backup and Recovery for Microsoft 365 now includes Microsoft 365 Backup Storage. Through strategic partnerships with a variety of security partners, including Acante, Dasera, Google Cloud, Splunk, and Wiz, CommVault announced the growth of its cyber and data security ecosystem.
Conclusion: What Should Investors Do?
Innovative product launches and ongoing efforts to differentiate itself in the market through cooperative agreements demonstrate CommVault's tenacity and potential for long-term growth. On the other hand, short-term difficulties, such as macroeconomic uncertainties, can be risky.
Despite the stock's potential for long-term growth, its stretched valuation, as suggested by the Zacks Value Style Score of F, indicates limited upside potential in the near term.
CVLT currently carries a Zacks Rank #3 (Hold), implying that existing investors should keep holding the stock while new buyers should wait for a better entry point into the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.