CommVault Systems (CVLT) Stock Forecast & Price Target

CommVault Systems is experiencing notable growth, with organic new term license revenue increasing approximately 14% year-over-year, reflecting strong sales productivity in a competitive hybrid cloud and security-focused market. The company reported a significant uptick in both term software and SaaS transactions, with $100K term subscription deals up 18% annually and over 1,000 new Subscription and SaaS customers added, showcasing strong customer acquisition efforts. Management has raised FY25 Total ARR guidance to 19-20%, driven by robust subscription revenue performance and contributions from Clumio, alongside a stable Net Revenue Retention rate of 127%, indicating a solid foundation for future growth.

CommVault Systems Inc. is experiencing a significant deceleration in business momentum, illustrated by a 15% year-over-year decline in organic new term licenses and a financial outlook that indicates lower free cash flow (FCF) guidance, downgraded from previous estimates. The company’s FCF guidance of $170M to $200M fell short of consensus expectations, primarily due to foreign exchange pressures and increased tax liabilities, which may hinder future growth. Additionally, potential risks, including competitive pressures from the Cohesity and Veritas merger and inherent volatility in the license model, could further affect CommVault's market position and financial performance.