CommVault Systems (CVLT) Stock Forecast & Price Target

CommVault Systems Inc. has demonstrated a robust revenue outlook, with FY26 guidance indicating that revenue, subscription revenue, gross margin, and EBIT margin are set to exceed consensus estimates. The company reported substantial growth in its SaaS offerings with approximately 70% contribution to F3Q NNARR, up from 60% in the previous quarter, alongside a record addition of ~700 new subscription customers. Additionally, significant year-over-year growth metrics were highlighted, with subscription ARR rising to $941 million (+28% YoY) and SaaS ARR increasing to $364 million (+41%), positioning the firm well for continued market share gains and a favorable growth trajectory in the coming years.

CommVault Systems Inc has experienced a decline in its SaaS Net Revenue Retention (NRR), decreasing from 125% to 121%, which raises concerns about the company's ability to retain existing customers and expand recurring revenue. The firm also revised its FY26 Total Annual Recurring Revenue (ARR) guidance downward, projecting growth of 18% instead of the previously indicated 18-19%, and reduced its Subscription and SaaS ARR growth estimate from 24% to 24%. Furthermore, the firm's free cash flow guidance was lowered due to a one-time restructuring payment, indicating potential financial strains and contributing to a significant drop in stock value, as investor sentiment may turn negative amid concerns of slowing IT spending.