Commvault Systems Inc (NASDAQ: CVLT)

Sector: Technology Industry: Software - Application CIK: 0001169561
Market Cap 3.78 Bn
P/B 17.46
P/E 43.50
P/S 3.30
ROIC (Qtr) 4.85
Div Yield % 0.00
Rev 1y % (Qtr) 19.50
Total Debt (Qtr) 918.65 Mn
Debt/Equity (Qtr) 4.24

About

Commvault Systems, Inc., or Commvault as it is commonly known, operates in the data protection and cyber resilience solutions industry, with its ticker symbol being CVLT. The company, established in Delaware and headquartered in New Jersey, has built a reputation for providing customers with a scalable platform that enhances cyber resilience by safeguarding their data amid increasing threats. Commvault's offerings cater to various environments, including on-premises, hybrid, and multi-cloud platforms, and are accessible through self-managed software,...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 1.03B provide 146.79x coverage of short-term debt 6.99M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 189.45M provides exceptional 76.79x coverage of interest expenses 2.47M, showing strong debt service capability.
  • Free cash flow of 216.33M provides exceptional 87.69x coverage of interest expense 2.47M, showing strong debt service ability.
  • Operating cash flow of 189.45M provides strong 123.99x coverage of tax liabilities 1.53M, showing excellent fiscal position.
  • Cash reserves of 1.03B provide robust 1.66x coverage of current liabilities 616.63M, indicating strong short-term solvency.

Bear case

  • Operating cash flow of 189.45M barely covers its investment activities of (5.86M), with a coverage ratio of -32.31, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (5.86M) provide weak support for R&D spending of 161.48M, which is -0.04x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 1.03B provide limited coverage of acquisition spending of (25.42M), which is -40.38x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 189.45M provides insufficient coverage of deferred revenue obligations of 732.88M, which is 0.26x, raising concerns about future service delivery capabilities.
  • The company's operating cash flow of 189.45M shows concerning coverage of stock compensation expenses of 120.45M, with a 1.57 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 234.56 Bn 28.15 5.46 10.73 Bn
2 CRM Salesforce, Inc. 204.28 Bn 32.96 5.39 11.14 Bn
3 SHOP Shopify Inc. 169.36 Bn 95.09 15.83 1.12 Bn
4 UBER Uber Technologies, Inc 167.13 Bn 10.04 3.37 12.19 Bn
5 INTU Intuit Inc. 140.92 Bn 175.06 33.55 6.78 Bn
6 ADBE Adobe Inc. 124.98 Bn 17.53 5.26 6.65 Bn
7 NOW ServiceNow, Inc. 121.03 Bn 69.24 9.11 2.40 Bn
8 ADP Automatic Data Processing Inc 100.13 Bn 23.64 4.72 4.37 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.78 2.50
EV to Cash from Ops. EV/CFO 19.16 12.27
EV to Debt EV to Debt 3.95 50.31
EV to EBIT EV/EBIT 36.26 10.96
EV to EBITDA EV/EBITDA 35.16 16.84
EV to Free Cash Flow [EV/FCF] EV/FCF 16.78 14.08
EV to Market Cap EV to Market Cap 0.96 -118.20
EV to Revenue EV/Rev 3.16 4.45
Price to Book Value [P/B] P/B 17.46 4.27
Price to Earnings [P/E] P/E 43.50 -133.65
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.97
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.54
Interest Coverage Int. cover (Qtr) 40.58 -51.80
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 801.49 -210.77
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 321.37 9,906.83
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.62
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -48.19 -265.85
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 24.36 55.76
EBIT Growth (1y) % EBIT 1y % (Qtr) 31.91 -227.83
EBT Growth (1y) % EBT 1y % (Qtr) 29.37 -88.00
EPS Growth (1y) % EPS 1y % (Qtr) -49.62 121.91
FCF Growth (1y) % FCF 1y % (Qtr) 4.72 -40.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 20.78 92.11
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.56 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 1.66 3.77
Current Ratio Curr Ratio (Qtr) 2.34 8.19
Debt to Equity Ratio Debt/Equity (Qtr) 4.24 0.16
Interest Cover Ratio Int Coverage (Qtr) 40.58 -51.80
Times Interest Earned Times Interest Earned (Qtr) 40.58 -51.80
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.50 -105.77
EBIT Margin % EBIT Margin % (Qtr) 8.73 -131.65
EBT Margin % EBT Margin % (Qtr) 8.51 -122.72
Gross Margin % Gross Margin % (Qtr) 81.40 58.14
Net Profit Margin % Net Margin % (Qtr) 7.60 -127.70