Commvault Systems Inc. Common Stock (CVLT)

FairStock Score: 44/100 — MIXED

Key Financials

Strengths

• Generates $247 million in annual free cash flow (6.2% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 34.5% demonstrating efficient capital deployment
• Revenue growth of 19.5% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($15) with negative 521% margin of safety—limited downside protection
• High leverage at 4.24x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of 1.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Commvault Systems Inc. Common Stock is a small-cap technology company valued at $4.0 billion. The business generates $1.1 billion in annual revenue with a 1.6% net margin and $247 million in free cash flow. From a quality standpoint, Commvault shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of 1.1 warrants caution. On valuation, the stock is commanding a steep 47.0x multiple, with trades far above its Graham Number ($15) with no margin of safety. Growth dynamics show revenue growing at 19.5% and profit growth of 61.4%. Our composite FairStock Score of 44/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Commvault's 20% revenue growth trajectory could accelerate as it captures additional market share in the technology sector. With $247 million in annual free cash flow (6.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 47x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer