- If you are wondering whether Commvault Systems at around US$105.94 is priced fairly or offering value, the stock’s recent track record gives you quite a bit to think about.
- The share price has risen 1.9% over the last week and 12.4% over the last month, although it is still down 14.7% year to date and 40.5% over the past year, compared with a gain of 57.6% over three years and 41.8% over five years.
- These moves have played out while the company continues to position itself in data protection and management, with investors reacting to ongoing product developments and customer adoption trends. Together, these factors help explain why the stock’s recent performance looks very different depending on the time frame you focus on.
- Commvault Systems currently records a valuation score of 2 out of 6. This indicates that some checks suggest potential undervaluation while others do not, and it sets up a closer look at traditional valuation methods before turning to a broader way of thinking about value later in the article.
Commvault Systems scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Commvault Systems Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a stock might be worth by projecting future cash flows and discounting them back to today’s value using a required rate of return.
For Commvault Systems, the model uses a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month Free Cash Flow is about $238.7m. Analysts provide Free Cash Flow estimates for the coming years, and Simply Wall St extrapolates further out, with projected Free Cash Flow reaching $458.0m in 2031 and moving to an extrapolated $615.7m by 2035. These figures are all in $ and are shown in millions, not billions.
Discounting those projected cash flows back to today produces an estimated intrinsic value of $177.42 per share. Compared with the recent share price of about $105.94, the DCF output indicates the stock is 40.3% undervalued based on these assumptions.
This model suggests the current price leaves a wide gap to the DCF estimate, which may appeal to investors who focus on cash flow based valuation.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Commvault Systems is undervalued by 40.3%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.
Approach 2: Commvault Systems Price vs Earnings
For profitable companies, the P/E ratio is a useful gauge because it links what you pay for the stock to the earnings the business is currently generating. A higher or lower P/E often reflects what the market is factoring in for future growth and how much risk investors are willing to accept for those earnings.
Growth expectations, earnings quality and business risk all influence what might be considered a normal or fair P/E. Faster expected earnings growth or lower perceived risk can support a higher multiple, while slower growth or higher risk typically point to a lower one.
Commvault Systems currently trades on a P/E of 61.85x. This sits well above the Software industry average P/E of 27.84x and the peer group average of 22.80x. Simply Wall St’s Fair Ratio for Commvault Systems is 35.60x, which reflects a preferred multiple based on factors such as earnings growth, profitability, industry, market cap and specific risk profile.
The Fair Ratio is more tailored than a simple industry or peer comparison because it adjusts for company specific characteristics rather than assuming all software stocks deserve similar multiples. Comparing the current 61.85x P/E with the 35.60x Fair Ratio suggests the stock is trading at a richer level than this framework would imply.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your Commvault Systems Narrative
Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple framework on Simply Wall St’s Community page where you connect your story about Commvault Systems to specific forecasts for future revenue, earnings and margins. These then flow through to a fair value that you can compare against the current share price.
In practice, a Narrative is your written view of what is driving Commvault Systems, tied directly to numbers such as fair value, expected revenue growth and profit margins. Instead of looking at the 61.85x P/E in isolation, you see how your assumptions stack up against what other investors are using.
These Narratives help you decide whether the stock looks attractive or expensive on your terms by lining up your Fair Value next to today’s price and flagging any gap. They refresh automatically when new data such as earnings, price target changes or M&A news is added to the platform.
For Commvault Systems, one investor might build a bullish Narrative closer to the US$185.0 fair value that assumes revenue of about US$1.7b and earnings of US$222.6m by 2029. Another might choose a cautious Narrative nearer US$144.0 that assumes revenue of about US$1.5b and earnings of US$153.2m, and the Community tools simply let you see where your own view sits along that spectrum.
Do you think there's more to the story for Commvault Systems? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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