Continuous AI recovery is the only way to consistently restore a company to its fullest potential.

Hello, everyone,

On days when investors are punishing companies with double-digit declines in earnings due to falling and negative free cash flow, I spent the weekend looking for a company where we see exactly the opposite. This company was already introduced here a few months ago by our dear @Multibagger .

This company is the market leader in data backup and recovery. Its software is considered one of the best backup and recovery solutions in the industry. Last quarter, the company surpassed the 8,000-customer mark.

$CVLT (-0,27 %)

What I like is that Commvault has successfully transitioned to a subscription-based model. This leads to more predictable revenue (ARR).

Key growth drivers include the expanding market for cyber resilience, the breadth of the partner ecosystem, and ongoing innovations in AI.

Commvault Systems, Inc.. is a provider of cyber resilience and data protection solutions. The company helps businesses protect, secure, and recover their data, applications, and identity systems from cyber threats and attacks. It delivers its solutions via the Commvault Cloud, a cloud-native platform that combines data security, cyber recovery, and identity resilience across on-premises, hybrid, multi-cloud, and Software-as-a-Service (SaaS) environments. The company offers a range of features designed to help customers prepare for, weather, and recover from cyber incidents such as ransomware, data corruption, infrastructure failures, and cyberattacks. Commvault Cloud offerings are divided into three packages: Operational Recovery, Autonomous Recovery, and Cyber Recovery. Operational Recovery provides core backup and recovery capabilities for hybrid enterprise workloads. The offerings include Commvault Cleanroom Recovery, Commvault HyperScale Grid, and others.

Number of employees: 3,300

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In the last fiscal year, Commvault Systems Inc.’s revenue rose by 18.9%, from $995.6 million to $1.2 billion. Meanwhile, net income fell by 7.2%, from $76.1 million to $70.7 million. The net profit margin was thus 6.0%, compared to 7.6% in the previous year. On October 28, 2026, Commvault Systems Inc. reported its Q3 results for the quarter ending September 30, 2026. Revenue for the reporting period was $312.4 million (+13.1% compared to the same quarter last year), and net income was $29.1 million (+97.6% compared to the same quarter last year).

DA Davidson Raises Commvault’s Price Target Due to Strong Subscription Growth

Analystenbewertungen

Published on October 28, 2026

Summary of the report on Commvault Systems (CVLT):

Key Points

• DA Davidson has raised the raised its price target from $185 to $210 and reaffirmed its “Buy” rating. [investing.com]
• This was due to better-than-expected quarterly results. The newly acquired subscription-based annual recurring revenue (Subscription Net New ARR) amounted to $51 million, while analysts had expected only about $43.5 million . [investing.com]
• At the time of this report, the stock was trading at around $169.52 , just slightly below the 52-week high of $174.25. Over the previous six months, it had gained approximately 76% gain . [investing.com]

Why Analysts Are Becoming More Optimistic

• Some investors were concerned that SaaS growth was slowing.
• DA Davidson considers these concerns to be exaggerated following the quarterly results.
• From the analysts’ perspective, the outlook for the second half of the year now even appears conservative—that is, set on the cautious side. [investing.com]
• Sustainable growth in subscription revenue is still expected in the range of the high teens to about 20% per year. [investing.com]

More positive news

• Also, Guggenheim raised its price target following the earnings report, from $175 to $200, while maintaining its positive rating. [investing.com]
• Commvault reported the following for the quarter:
• Earnings per share: $1.38 (Estimate: $1.24)
• Revenue: $312.39 million (expectation: $310.24 million) [investing.com]

Conclusion for Investors

The report is clearly bullish. Several analysts view Commvault’s operational performance as stronger than expected. Recurring cloud and subscription revenue, in particular, is performing very well. The only downside: According to the InvestingPro rating mentioned in the article, the stock may already be overvalued . [investing.com]

Juan’s verdict: 🟢 A quality stock with strong momentum, rising estimates, and robust ARR growth. Fundamentally, it is currently one of the stronger software stocks in the cybersecurity/data protection sector. [investing.com]

Geographic Revenue Breakdown:

2026 (USD)

United States 631 million

Other 553 million

Company: Commvault Systems

WKN: A0JL3S

ISIN: US2041661024

Source: Exclusively MarketScreener – Finanzdaten Commvault Systems

The fiscal year ends in March. All financial figures are in millions of USD, as MarketScreener reports the data in USD.

Date of publication: April 28, 2026

5. My Assessment of the 2036 Portfolio

Commvault shows an interesting growth profile. Three points in particular stand out:

1. Revenue growth

• 2025: $995.6 million
• 2029: $1,610 million
• Growth over four years: approximately 62%.

2. Operating Performance

EBIT grows from 209.7 to 368.5 million USD. Particularly positive: EBIT is growing faster than revenue.

The EBIT margin rises from 21.07% to 22.89%.

3. Free Cash Flow

Free cash flow increases from 203.6 to 369.5 million USD.

This corresponds to growth of approximately 81.5%.

This is a strong sign for a software company.

My Conclusion

Criterion

Assessment

Revenue Growth

🟢 Good

EBIT growth

🟢 Very good

Margin Performance

🟢 Positive

Free cash flow

🟢 Very strong

Balance Sheet

🟢 Net Cash

Earnings Growth

🟢 Strong starting in 2027

ROE

🟡 Remarkably high

My verdict: From a fundamental perspective, Commvault is an interesting candidate for the second wave of AI.

I find the combination of data security, backup, cyber resilience, and the growing importance of AI-generated data particularly exciting.

However: Earnings growth in 2025/2026 is weaker than operational performance. This should be taken into account in the valuation.

For the 2036 portfolio, Commvault would be an interesting candidate for me in the AI data security and cybersecurity sector.

An important caveat: These figures are company forecasts from MarketScreener, not guaranteed results.

What I particularly like:

1. Free cash flow yield

From 3.07% (2025) to 5.78% (2029).

This is a positive trend. Commvault is becoming increasingly attractively valued relative to its expected free cash flow.

What stands out, however, is the jump to 9.39% in 2026 and the subsequent decline. Here, I would keep an eye on the underlying cash flow estimates.

2. P/E Ratio – Significant Improvement

• 2025: 93.67
• 2026: 49.23
• 2027: 30.82
• 2028: 27.18
• 2029: 23.79

That represents a significant easing of the valuation.

If Commvault meets its earnings forecasts, the stock could reach a much more reasonable valuation level by 2029.

3. PEG – particularly attractive right now

2027: 0.9x

2028: 1.4x

A PEG below 1 is often considered attractive, provided that the expected earnings growth is sustainable.

The negative values for 2025 and 2026, however, should not be interpreted as a favorable valuation. They result from negative earnings growth rates and are difficult to interpret meaningfully.

Particularly exciting: Commvault has confirmed and updated its annual forecast for fiscal year 2027:

• Subscription revenue: $1,127–1,133 million
• Subscription ARR: $1,205–1,215 million
• Free cash flow: $255–265 million
• Non-GAAP EBIT margin: 21–21.5%

I like that. The company isn’t just growing—it’s also generating solid cash flow.

https://ir.commvault.com/news-releases/news-release-details/commvault-announces-second-quarter-fiscal-2027-financial-results?utm_source=chatgpt.com

3. My Assessment for Portfolio 2036

Criterion

Rating

Revenue Growth

🟢 Very interesting

SaaS growth

🟢 Very strong

Free Cash Flow

🟢 Very good

FC Yield

🟢 Improvement

P/E Ratio

🟢 Significant decline

PEG 2027

🟢 Attractive

Balance Sheet / Liquidity

🟢 Strong

Dividend

⚪ None

Valuation Risk

🟡 Still present

4. My Conclusion: Buy or Watch?

I now see Commvault as an interesting candidate for the second wave of AI.

Why?

AI is generating more and more data. Companies need to be able to protect, back up, manage, and—in an emergency—restore this data.

This is precisely where Commvault’s business model comes in.

I find three areas particularly exciting:

AI data security: Protection of increasingly complex corporate data.

Cyber resilience: Recovery from cyberattacks and ransomware.

Cloud and SaaS: Recurring revenue and increasing customer loyalty.

My biggest selling point is the combination of 33% SaaS growth and rising free cash flow.

My decision for the 2036 portfolio:

I’m going to add Commvault to my shortlist of stocks to buy. The P/E ratio of 23.79 for 2029 and the PEG ratio of 0.9 for 2027 look interesting.

However, I won’t buy blindly based on future metrics. The forecasts still need to be earned.

My verdict: Fundamental growth is solid, and the valuation is becoming more attractive—Commvault deserves a spot on the watch list.

The key question now is whether the market will once again assign the company a higher valuation as soon as the projected earnings growth is reflected in the actual quarterly results.

Dear readers,

I look forward to hearing your thoughts in the comments.

$CVLT (-0,27 %)

Perhaps an interesting small cap from the software sector I found in $CVLT (-0,27 %) found.

Commvault: Software quality with new earnings power

CommVault (NASDAQ:CVLT) comes from the software and data protection world. The company helps companies to back up and restore data and better control cyber risks. In a world where data loss and cyberattacks are becoming costly, this is an area with structural tailwinds.

The story here is not so much explosive sales growth as increasing profitability. The EBIT margin is 8.8%, the five-year average is 7.5%. ROIC stands at 12.1%. More importantly, analysts expect EBIT to grow by a whopping 49.0% per year over three years. EPS is also expected to rise sharply - from 1.97 to 4.29 dollars.

In terms of turnover, Commvault initially appears less spectacular than the other two names. Revenue has risen by an average of 8.2 % over the last five years and is expected to grow at a CAGR of around 14 % over the next three years. The decisive factor here, however, is the combination of software character, a high gross margin of 81.4% and strongly growing free cash flow. Levered free cash flow is 181.5 million dollars and the FCF yield is 5.3%.

The share was recently severely punished and is now trading at only around 39% of its 52-week high. This is precisely why the name is interesting: analysts see 79% potential up to 138.38 dollars, InvestingPro around 21% up to 94.52 dollars. This is the most speculative case in this screening, but also the one with the greatest re-rating potential if the margin expansion comes through as expected

I had a little browse through my Investing. There was a screening there.

The focus of this screen was on dynamics rather than absolute values. High margins are nice, but are often already priced in. More exciting are companies whose profitability still has room for improvement - and are making use of this room.

The most important criteria:

• Small-cap size (approx. USD 300 million to USD 10 billion market capitalization)
• EBIT margin ≥ 5%, with positive EBIT margin momentum over three years at the same time
• Average EBIT margin of the last five years below 10% to exclude maturity phases
• ROIC currently ≥ 8%, with positive ROIC CAGR
• ROIC above the cost of capital (WACC)
• EBIT forecast CAGR ≥ 12% and sales forecast CAGR ≥ 8%
• At least 20% analyst potential

$LMB (+0,99 %) From project business to scalable platform

Limbach Holdings (NASDAQ:LMB) is a good example of how a previously fragmented service model can be professionalized step by step. The company is active in the building technology sector - a market that has long been characterized by low margins.

This is precisely where Limbach has made a start in recent years. The EBIT margin currently stands at 8%, after a five-year average of less than 5%. The momentum is remarkable: the EBIT margin grew at a CAGR of around 40% over three years, while ROIC climbed to 16%. This means that the company earns significantly more than its capital costs.

The outlook for the future also remains constructive. Analysts are forecasting EBIT growth of just under 20% per year, while sales are expected to grow at a CAGR of around 16%. Despite this development, the share is trading well below its 52-week high; analysts see potential upside of around 47%.

Limbach is not a high-flyer, but a typical "improver": less spectacular, but increasingly efficient.

$MOD (+4,19 %) : Industrial know-how meets structural tailwind

Modine Manufacturing (NYSE:MOD) has repositioned itself in recent years. A traditional industrial company has increasingly become a provider of thermal management solutions - an area that is benefiting from data centers, electrification and efficiency requirements.

The figures reflect this change. The EBIT margin is now 11.6%, more than double the long-term average. The margin development is no coincidence: the EBIT margin grew at a CAGR of over 38% over three years, while ROIC is at 15.6% and continues to rise.

The outlook is particularly interesting. Analysts expect EBIT growth of over 24% per year and sales growth of around 17% CAGR. At the same time, the WACC is a good 10%, below the return on capital employed.

The market has already partially rewarded this development, but analysts still see upside potential of over 32%. Modine is therefore a classic case of structural change that is not yet fully reflected in the share price.

$$CVLT (-0,27 %) : Software small cap with a new focus on efficiency

CommVault Systems (NASDAQ:CVLT) operates at the interface between industry and software. The company offers data management and backup solutions for hybrid IT infrastructures - a market with high inertia and stable customer relationships.

For a long time, CommVault was profitable but not very dynamic. The picture is beginning to change. The EBIT margin is currently 8.2%, well above the historical average. Even more important is the development of the return on investment: ROIC is 11%, with a ROIC CAGR of over 36% in the last three years.

The outlook is unusually strong for a software stock of this size. Analysts expect EBIT growth of over 48% per year, with solid sales momentum. Despite these forecasts, the share is trading well below previous valuation levels, with analyst potential of just under 50%.

$CVLT (-0,27 %) is not a momentum play. It is an example of how operational discipline and efficient use of capital can generate new fantasy in a mature market.

Perhaps this will be of interest to some of you.

Presumably because the New York Times reports on the Pentagon's war plans against China, which Musk was apparently briefed on at the Pentagon today.

In a military conflict between the two economic powers USA and China, the first "Line of Contact" would be a digital one: cyber attacks.

And even if only hypothetical scenarios are reported, this will probably already lead to an intensification of the constant mutual cyber attacks. Information is key.

• Cyberark $CYBR
• Palantir Tech $PLTR (+1,95 %)
• Check Point Software Technologies $CHKP (+3,51 %)
• Crowdstrike $CRWD (+1,98 %)
• VeriSign $VRSN (+1,63 %)
• Zscaler $ZS (+0,23 %)
• Okta $OKTA (+3,09 %)
• Cloudflare $NET (+3,31 %)
• Fortinet $FTNT (+4,7 %)
• Cisco Systems $CSCO (+3,49 %)
• Palo Alto Networks $PANW (+2,61 %)
• Akamai Technologies $AKAM (+6,44 %)
• BlackBerry $BB (+2,93 %)
• NetScout Systems $NTCT (+2,01 %)
• CommVault Systems $CVLT (-0,27 %)

Sources:

• The Pentagon set up a briefing for Musk on plans for a potential war with China.
• NYTimes Liveblog: Trump Administration Live Updates: Trump Rejects Idea of Letting Musk See Secret Plans for War With China

#newyorktimes
#china
#usa
#trump
#pentagon
#elonmusk