CommVault Systems (CVLT) Stock Forecast & Price Target

CommVault Systems Inc. demonstrated a robust financial performance in Q2 of fiscal 2026, exiting with a Total ARR of $1.04 billion, representing a 22% year-over-year increase, supported by strong term software volume and significant growth in $100K+ deals, which saw a 17% YoY growth. The company is forecasting Total ARR growth of 18%–19% and Subscription ARR growth of 24%–25% year-over-year, reflecting upward revisions from previous estimates, further emphasizing the positive trajectory of its financial metrics. Notably, SaaS ARR surged by 56%, accounting for 32% of the overall ARR, while the company experienced strong momentum in customer growth and high net retention rates in its SaaS offerings, signaling robust demand for its data and information management solutions.

CommVault Systems' recent financial report indicates a concerning trend in its subscription revenue, driven by a contraction in term license duration, which fell 9% quarter-over-quarter, leading to a miss on expected performance. The company's gross margin contracted by 170 basis points, primarily due to decreasing high-margin term license sales and a greater reliance on lower-margin SaaS offerings, reflecting shifts in their revenue model. Additionally, projections for future earnings per share have been revised downward, as management anticipates continued pressure on gross margin and operating margins amidst ongoing investments aimed at growth.