Last Update 22 Feb 26

CVLT: Reset Sector Multiples Will Support Future Upside From Current Levels

Analysts have reduced their average price target on Commvault Systems by $67 to $140.33, citing modestly lower peer multiples, more cautious security spending, and increasing competitive concerns.

Analyst Commentary

Recent Street research on Commvault Systems reflects a broad reset in expectations, with multiple firms cutting their price targets by amounts ranging from $10 to $67 and an average target now sitting at $140.33. Across these reports, analysts are weighing valuation, execution, and growth potential against a more cautious view on security budgets and competition.

Bullish Takeaways

Bullish analysts point out that even after reductions, some targets, such as the US$152 level cited in recent research, still sit above the current average. This suggests they see room for execution to support a higher valuation over time.
Several reports keep positive stock ratings in place while trimming targets, which signals that these analysts view the cuts as a recalibration of assumptions rather than a breakdown in the core business case.
Supportive views generally hinge on Commvault’s positioning in data protection and security related workloads, where analysts see continued relevance for the company’s offerings within enterprise IT budgets.
Bullish analysts tend to frame the target cuts as driven by external factors such as peer multiples, rather than company specific downgrades to long term growth potential that is already embedded in their models.

Bearish Takeaways

Bearish analysts focus on the size of the reductions, with multiple target cuts in the US$30 to US$60 range. They view this as a sign that prior valuation levels were too rich relative to updated assumptions on the sector.
Several reports explicitly cite modestly lower peer multiples, suggesting these analysts see less room for Commvault’s valuation to stretch meaningfully above sector norms without clearer evidence on growth durability.
Heightened caution on security and IT budgets is a recurring theme, with analysts concerned that slower or more selective customer spending could make it harder for Commvault to consistently hit aggressive growth or margin targets.
Incremental competitive concern is also flagged, with bearish analysts worried that pressure from other data protection and security vendors could challenge Commvault’s ability to sustain premium pricing or win larger deals. They see this as a factor that may cap upside to their models.

What's in the News

Commvault issued earnings guidance for Q4 FY2026, with subscription revenue expected at US$203 million to US$207 million and total revenue at US$305 million to US$308 million, and updated FY2026 guidance to subscription revenue of US$764 million to US$768 million and total revenue of US$1.177b to US$1.18b (Key Developments).
The company announced Commvault Geo Shield, a solution aimed at helping customers protect and recover critical data while maintaining control over data location, operations, and encryption keys, with multiple deployment options to support evolving cloud sovereignty requirements (Key Developments).
Commvault expanded its collaboration with Google Cloud, adding capabilities such as immutable backups via Air Gap Protect, Cloud Rewind for rebuilding cloud applications, and advanced compliance search for Google Workspace to support ransomware recovery and regulatory needs (Key Developments).
The company increased its equity buyback authorization to US$250 million and reported that, from October 1, 2025 to December 31, 2025, it repurchased 327,000 shares for US$41 million, bringing total repurchases under the May 3, 2022 program to 7,359,883 shares for US$687 million (Key Developments).
Commvault was cited in a broader discussion about software valuations as Orlando Bravo described the software selloff as creating a huge buying opportunity, which put sector sentiment around software names, including data protection vendors, in focus (Financial Times, Periodicals).

Valuation Changes

Fair Value: $140.33 remains unchanged, indicating no adjustment to the core valuation estimate.
Discount Rate: The discount rate has fallen slightly from 9.06% to 9.03%, a small reduction in the required return used in the model.
Revenue Growth: The revenue growth assumption is essentially unchanged at 11.66%, with only an immaterial rounding adjustment.
Net Profit Margin: The net profit margin assumption remains effectively flat at 10.13%, reflecting no meaningful shift in margin expectations.
Future P/E: The future P/E multiple has edged down slightly from 48.40x to 48.36x, representing a very small recalibration of the earnings multiple applied.

Accelerating demand for advanced cyber resilience and compliance-ready data management is driving expanded enterprise adoption and recurring revenue growth.
Increasing SaaS platform success, strategic partnerships, and a shift to subscription-based models are improving revenue quality, market reach, and long-term earnings stability.
Heavy reliance on expanding existing customer subscriptions and lumpy large deals, alongside evolving revenue models and integration risks, could challenge Commvault's future growth, margin stability, and market position.

Catalysts

About Commvault Systems

Provides a cyber resilience platform for protecting and recovering data and cloud-native applications in the Americas and internationally.What are the underlying business or industry changes driving this perspective?

Surging demand for enterprise data protection and recovery fueled by accelerating cyber threats, with Commvault's enhanced cyber resilience platform (including Cleanroom Recovery, Air Gap Protect, and the upcoming Satori Cyber acquisition) driving new customer adoption and increased wallet share-likely supporting sustained double-digit revenue and ARR growth.
Tightening global data privacy and compliance requirements are increasing demand for compliant, robust data management-Commvault's successful customer wins in highly regulated sectors (e.g., aerospace, insurance, government) position the company to benefit from elevated compliance-driven enterprise spending, which should help underpin revenue and recurring ARR expansion.
Rapid expansion and successful cross-sell/upsell momentum within the SaaS (Metallic) platform-evidenced by 63% SaaS ARR growth, a 45% increase in multi-product customers, and 125% SaaS net dollar retention-point to continued improvement in the quality and predictability of future revenues, directly supporting margin expansion and higher earnings visibility.
Strengthened partnerships with global cloud providers, leading cybersecurity vendors, and system integrators (e.g., Deloitte, CrowdStrike, HPE, Kyndryl, hyperscaler marketplaces) are significantly expanding market reach and lowering acquisition costs, likely increasing net new customer growth and improving net margins over time.
The transition to a recurring SaaS/subscription model-now 85% of total ARR and climbing-is transforming the revenue mix toward higher-quality, more predictable streams and reducing reliance on perpetual/legacy licensing, supporting long-term topline growth and greater earnings consistency.

Commvault Systems Earnings and Revenue Growth

Commvault Systems Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Commvault Systems's revenue will grow by 12.2% annually over the next 3 years.
Analysts assume that profit margins will increase from 7.7% today to 11.6% in 3 years time.
Analysts expect earnings to reach $173.1 million (and earnings per share of $3.97) by about September 2028, up from $81.1 million today. However, there is some disagreement amongst the analysts with the more bearish ones expecting earnings as low as $144 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 70.4x on those 2028 earnings, down from 101.6x today. This future PE is greater than the current PE for the US Software industry at 36.2x.
Analysts expect the number of shares outstanding to grow by 1.68% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.4%, as per the Simply Wall St company report.

Commvault Systems Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The sustained transition from traditional software licensing to a recurring subscription/SaaS-based revenue model, while driving topline growth, is noted to have a different margin profile; management guided for gross margins in the low-80% range (reflecting SaaS mix) and acknowledged that the Satori Cyber acquisition will be modestly dilutive to margins for several quarters, indicating ongoing risk of margin compression and potentially impacting overall earnings and net margin.
The strong near-term growth in subscription ARR and large "land and expand" deals may mask longer-term risk that much of Commvault's revenue momentum is coming from existing customers expanding subscriptions, rather than new logo growth, leading to possible future deceleration in net new ARR as this lever matures-potentially restricting long-term revenue growth rates.
The business's positive results are partly driven by an exceptionally robust term software quarter, including large deals closing in the final week, raising concerns about revenue linearity and deal timing. This reliance on large, lumpy deals can introduce volatility in quarterly results and impact the predictability of both revenues and earnings.
Long-term, the text's optimism about cross-selling and platform expansion depends on Commvault's ability to successfully integrate and monetize a growing number of products and recent acquisitions (e.g., Satori Cyber), which, if less successful than projected, could increase R&D and integration costs without proportionate revenue or customer gains-pressuring profitability and cash flows.
While management frequently touts market leadership and competitive displacement, they also acknowledge that the core on-premises software market is growing only at low single digits. If industry secular trends such as cloud migration and vendor consolidation accelerate, Commvault risks losing share to hyperscale platforms or fully integrated data management suites, which could structurally limit its long-term addressable market and revenue growth potential.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $208.089 for Commvault Systems based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $225.0, and the most bearish reporting a price target of just $176.8.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.5 billion, earnings will come to $173.1 million, and it would be trading on a PE ratio of 70.4x, assuming you use a discount rate of 8.4%.
Given the current share price of $185.22, the analyst price target of $208.09 is 11.0% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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