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Commvault Systems, Inc. Just Beat EPS By 36%: Here's What Analysts Think Will Happen Next
It's been a good week for Commvault Systems, Inc. (NASDAQ:CVLT) shareholders, because the company has just released its latest quarterly results, and the shares gained 2.3% to US$172. It looks like a credible result overall - although revenues of US$312m were what the analysts expected, Commvault Systems surprised by delivering a (statutory) profit of US$0.69 per share, an impressive 36% above what was forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
Taking into account the latest results, the current consensus from Commvault Systems' 19 analysts is for revenues of US$1.31b in 2027. This would reflect a satisfactory 4.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 32% to US$2.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.31b and earnings per share (EPS) of US$2.42 in 2027. So the consensus seems to have become somewhat more optimistic on Commvault Systems' earnings potential following these results.
See our latest analysis for Commvault Systems
The consensus price target rose 15% to US$189, suggesting that higher earnings estimates flow through to the stock's valuation as well. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Commvault Systems analyst has a price target of US$210 per share, while the most pessimistic values it at US$157. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Commvault Systems is an easy business to forecast or the the analysts are all using similar assumptions.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Commvault Systems' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 8.9% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 17% per year. Factoring in the forecast slowdown in growth, it seems obvious that Commvault Systems is also expected to grow slower than other industry participants.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Commvault Systems' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Commvault Systems' revenue is expected to perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Commvault Systems going out to 2029, and you can see them free on our platform here.
Before you take the next step you should know about the 2 warning signs for Commvault Systems that we have uncovered.
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