CommVault Systems (CVLT) Stock Forecast & Price Target

CommVault Systems Inc has demonstrated a robust financial outlook, with revenue estimates for FY26 surpassing consensus expectations, alongside strong growth in subscription revenue and gross margins. The company's SaaS offerings contributed approximately 70% to its fiscal Q3 net new annual recurring revenue (NNARR), reflecting an increase from 60% in the prior quarter, and resulting in a record quarter for new customer additions. Additionally, the company's solid subscription annual recurring revenue (ARR) reached $941 million, a 28% year-over-year increase, fueled by significant growth in large multi-year deals and promising indicators for future customer expansions.

CommVault Systems, Inc. has experienced a decline in its SaaS Net Revenue Retention (NRR), dropping from 125% to 121%, which indicates challenges in retaining existing customers and driving consistent revenue growth. Additionally, the company has lowered its fiscal year 2026 Total Annual Recurring Revenue (ARR) guidance, resulting in a projected growth rate of 18% compared to the previously expected 18-19%, further contributing to investor concerns about slowing growth. These factors, combined with downward pressure on the stock due to reduced forecasts and a high dependency on new business for quarterly performance, suggest significant risk of multiple compressions if market sentiment deteriorates.