CommVault Systems stock rating upgraded to Buy at Guggenheim on data protection tailwinds
Investing.com
Published Jul 16, 2025 03:49AM ET
Investing.com - Guggenheim upgraded CommVault Systems (NASDAQ:CVLT) from Neutral to Buy on Wednesday, setting a price target of $210.00, which represents approximately 20% upside potential. The data management software provider, currently valued at $7.4 billion, has maintained impressive gross profit margins of 82% and shows strong financial health according to InvestingPro metrics.
The upgrade comes as Guggenheim cites "positive checks" and "sustainable secular tailwinds in data protection" as key factors supporting their more bullish outlook on the data management software provider. This optimism is supported by CommVault's solid financial position, with the company holding more cash than debt on its balance sheet.
Guggenheim expects CommVault to deliver upside to key metrics at the start of fiscal year 2026, projecting organic constant currency net new annualized recurring revenue (NNARR) of about $41 million for the first quarter, significantly higher than investor expectations in the low $30 million range.
The research firm anticipates reported total annual recurring revenue (ARR) growth of nearly 24%, with organic constant currency growth of 18%, bolstered by an estimated 3 percentage point tailwind from foreign exchange and another 3 points from mergers and acquisitions.
Guggenheim believes CommVault will achieve balanced growth with both topline expansion and free cash flow margin exceeding 20% this year, making it a "balanced and sustainable Rule of 40 company." The company's recent revenue growth of 18.6% and strong cash flows support this outlook, though current trading multiples suggest the stock may be trading above its Fair Value.
In other recent news, Commvault Systems has reported a significant 45% increase in Subscription revenue, which now makes up 63% of its total revenue. This growth exceeded analysts' expectations and was driven by increased sales in cyber resilience products and compliance with regulatory standards. The company also completed the sale of its headquarters in Tinton Falls, New Jersey, for $36.0 million, opting for a leaseback arrangement to continue operations at the location. In strategic moves, Commvault has appointed Alan Atkinson as its first Chief Business Development Officer and Michelle Graff as Senior Vice President of Global Partners (NYSE:GLP) and Channel. These appointments aim to enhance the company's partnership strategies and market reach. Additionally, Commvault has partnered with Kyndryl to improve cyber resilience services, focusing on faster recovery from cyber incidents. Analyst firms Piper Sandler and Cantor Fitzgerald have maintained a Neutral rating on Commvault stock, citing its ongoing sector focus and revenue growth. Piper Sandler noted the company's expanding partnerships, while Cantor Fitzgerald highlighted the strong demand for Commvault's cyber resilience solutions.
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Written By: Investing.com
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