RBC Capital has reduced its price target for CommVault Systems (NASDAQ: CVLT) to $100.00 from $167.00, while keeping a Sector Perform rating on the shares. The revised target now sits at the low end of analyst estimates, which InvestingPro data shows range from $100 to $185. At the time of the update the stock was trading at $92.82, substantially below its 52-week high of $200.68.
The downgrade follows an earnings period described by RBC analyst Dan Bergstrom as "mixed." The firm observed that CommVault’s stock had already fallen more than 30% after the report, a move RBC characterized as "extended" relative to the company’s results. InvestingPro data highlights the stock’s recent volatility, noting a 25.44% decline over the past week and a 45.46% drop over the past six months.
Investor attention has centered on several recurring-revenue metrics and outlook items. RBC highlighted concerns around NNARR (Net New Annualized Recurring Revenue), NRR (Net Revenue Retention), forward guidance, and potential ripple effects for the wider sector. Those concerns weighed on the firm’s view even as the company sustained healthy unit economics in other areas.
CommVault reported fiscal third-quarter results that showed mixed outcomes across key metrics. The company missed expectations on net new annualized recurring revenue, posting $39 million versus a projected $40-$45 million range. At the same time CommVault outperformed consensus on total revenue and margins. The firm’s gross profit margin remains robust at 81.44%, and the company is profitable with positive earnings.
RBC pointed to several drivers behind the price target cut: another soft quarter, compression in peer group valuation multiples, and a shift in valuation modeling to calendar year 2027 estimates. The stock currently trades at a price-to-earnings ratio of 67.36. InvestingPro’s fair value analysis, however, indicates the stock is undervalued on that metric and offers 15 additional insights on CVLT alongside research on more than 1,400 U.S. equities.
Other sell-side firms have adjusted their outlooks in the wake of the quarterly report. KeyBanc Capital Markets, while retaining an Overweight rating, lowered its target to $108.00 and cited the company’s movement toward software-as-a-service (SaaS) contracts and longer-duration deals. Cantor Fitzgerald cut its target to $100.00, referencing the company’s recalibrated NNARR expectations. Stephens kept an Overweight rating but reduced its target to $135.00 amid ARR growth concerns. Truist Securities kept a Buy rating and trimmed its target to $155.00 following the mixed results, and Mizuho lowered its target to $140.00 while maintaining an Outperform rating.
RBC suggested that management is taking a conservative stance on guidance as it approaches the company’s initial fiscal year 2027 outlook. The analyst noted that investors are likely to seek improved execution before materially changing sentiment. The next earnings release, which RBC flagged as potentially pivotal, is expected on May 5, 2026.
The market moves and analyst revisions reflect a focus on recurring revenue traction and valuation reset dynamics across the enterprise software sector. While CommVault’s gross margins and profitability underline durable unit economics, the shortfall in NNARR and broader multiple compression have created near-term uncertainty about growth trajectory and investor sentiment.
Contextual note: The information above reflects analyst actions, company results, and data points as reported in the company’s recent fiscal third-quarter disclosures and market-data aggregates.