A Look At Commvault Systems (CVLT) Valuation After SaaS Slowdown And Legal Investigations

Commvault Systems (CVLT) is under legal scrutiny after several law firms opened investigations into potential securities law violations following Q3 FY2026 results, where SaaS ARR growth slowed to 40% and investor losses mounted.

See our latest analysis for Commvault Systems.

The legal investigations and SaaS ARR slowdown news came after a sharp reset in sentiment, with a 30 day share price return of a 21.04% decline and a year to date share price return of a 25.64% decline. The 1 year total shareholder return of a 50.05% loss contrasts with a 54.54% gain over three years and 43.03% over five years, suggesting longer term holders have still seen positive outcomes despite recent selling pressure.

If this kind of volatility has you looking beyond a single name, it could be a moment to scan 22 top founder-led companies for other potential ideas to research.

So with Commvault now trading at US$92.34, annual revenue of about US$1.15b, and a market price that sits well below the average analyst target, is this a reset that creates a buying opportunity, or is the market already pricing in future growth?

Most Popular Narrative: 34.2% Undervalued

Commvault's widely followed narrative points to a fair value of about $140.33 per share versus the latest close at $92.34, framing a sizeable valuation gap that rests on specific growth and margin assumptions rather than short term sentiment.

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.

Read the complete narrative.

Curious how a business with mid teens top line assumptions and rising margins gets to this higher fair value? The narrative leans on robust earnings compounding, a richer recurring revenue mix, and a future earnings multiple that still sits well above many software peers.

Result: Fair Value of $140.33 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on execution, and softer revenue assumptions, along with reliance on expanding existing subscriptions and large, timing sensitive deals, could easily challenge that upbeat narrative.

Find out about the key risks to this Commvault Systems narrative.

Another Angle: Market Multiple Sends A Different Signal

That fair value of about $140.33 contrasts sharply with how the market is pricing Commvault today. The stock trades on a P/E of 46.1x, compared with 25.4x for the US Software industry and a fair ratio of 34.1x. This points to valuation risk rather than a simple discount. So which story do you trust more: the earnings model or the current multiple?

See what the numbers say about this price — find out in our valuation breakdown.

Next Steps

If the mixed signals here leave you on the fence, it makes sense to look at the underlying data yourself and move quickly to decide where you stand. Our breakdown of 1 key reward and 1 important warning sign can help you weigh both sides clearly.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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