Stephens adjusted its valuation view of CommVault Systems (NASDAQ: CVLT) on Wednesday, lowering the firm’s price target to $135.00 from $162.00 but keeping an Overweight rating on the data protection software company’s shares. The new target implies meaningful upside relative to the stock’s last quoted level of $89.13.
The price-target reduction follows a report from CommVault showing a shortfall in net new annual recurring revenue (ARR) and a SaaS net revenue retention (NRR) figure that came in below expectations. Stephens attributed the miss mainly to mix dynamics, including a higher-than-anticipated contribution from the SaaS mix in combination with large, multi-year on-premises term deals, rather than to a broad deterioration in demand fundamentals.
Stephens described the market’s reaction to the results as an "overreaction," noting that the firm’s revised view reflects only a roughly 100 basis point reduction in the company’s ARR growth outlook. The research house nonetheless applied a more cautious valuation multiple in its updated model, using a 4.5x forward enterprise-value-to-revenue multiple.
Market pricing has been volatile following the report. InvestingPro data noted the stock has fallen 25.44% over the past week and the share price is trading near a 52-week low of $84.44. The article’s earlier note of an approximately 30% decline in CommVault’s stock price highlights the scale of the move from recent highs.
Stephens pointed to offsetting positives for its maintained Overweight stance, including strong customer additions across both SaaS and software segments, continued wins displacing legacy systems, and exposure to secular cloud and SaaS adoption trends. Those operational strengths are reflected in CommVault’s financial metrics cited by the research firm, including gross profit margins of 81.44% and revenue growth of 21.52%.
CommVault’s latest quarter, third-quarter fiscal 2026, delivered an earnings-per-share (EPS) beat and revenue ahead of consensus. The company reported EPS of $1.17 versus analyst expectations of $0.98, and revenue of $314 million compared with the anticipated $299.05 million. Despite the overall earnings and revenue beat, net new annualized recurring revenue (NNARR) came in at $39 million, below the company’s guidance range of $40 million to $45 million.
Following the results, other research firms adjusted their targets while keeping constructive ratings. Truist Securities cut its price target from $175.00 to $155.00 and maintained a Buy rating. Mizuho lowered its target from $180.00 to $140.00 while keeping an Outperform rating. Both adjustments cited the NNARR shortfall even as the quarter showed an earnings beat.
What this means in context
- Stephens’ move narrows the valuation gap while signaling continued confidence in the company’s long-term positioning in cloud and SaaS adoption, balanced by a more conservative multiple.
- Investors face a tension between strong margin and revenue growth metrics and near-term ARR trajectory that prompted multiple sell-side price-target reductions.
- Market price action suggests significant sensitivity to ARR guidance and NNARR delivery, even when headline EPS and revenue numbers exceed expectations.
This report summarizes the recent analyst adjustments and company disclosures; it reflects the information reported around CommVault’s latest quarter and subsequent analyst reactions. No new performance figures beyond those reported by the company and the analysts are introduced here.