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CommValut Systems (CVLT - Free Report) is a Zacks Rank #5 (Strong Sell) and has the growth divergence that I always look for. That means I see a strong Zacks Growth Style Score and weak Zacks Value Style Score. Growth investors and value investors are looking for different things so I know I am on the right path when I see that. CVLT also recently beat the Zacks Consensus Estimate, yet it has the lowest Zacks Rank. Let’s take a look at why that is the case in this Bear of the Day article.
Description
CommVault provides Unified Data Management solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. The CommVault QiNetix platform, based on CommVault's Common Technology Engine, integrates Galaxy backup and recovery, snapshot management and recovery, remote replication, active data migration and archiving, e-mail compliance, enterprise service level management and reporting and storage resource management software solutions. The QiNetix unified approach is designed to allow customers to add integrate QiNetix components, at a fraction of the time, effort and money required by separate point products.
Earnings History
The first thing I do when I look at stock is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has been able to communicate to the market. A stock that consistently beats is one that has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of CVLT, I see four straight beats of the Zacks Consensus Estimate. This makes the case even more strange that it is a Zacks Rank #5 (Strong Sell).
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For CVLT, I see estimates fluctuating.
This quarter has moved from a $0.49 to $0.51.
Next quarter has seen a similar increase from $0.58 to $0.59.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is negative for those numbers.
I see 2021 moving from $2.56 to $2.54 over the last 60 days.
The 2022 number has moved from $3.15 to $3.11 over the same time horizon.
Negative movement in earnings estimates like that are the reason that this stock is a Zacks Rank #5 (Strong Sell).
The real read through is that if revisions like this cause a stock to move to a Zacks Rank #5 (Strong Sell) imagine what the other end of the spectrum must be seeing in terms of estimate revisions.
Valuation
The valuation for CVLT isn’t that bad when comparing the stock to the industry average. I see a forward PE of 30x and that is lower than the 26x industry average. The proce to book of 9,1x is right in line with the industry average and the price to sales of 5.1x is well below the 9.1x industry average. I see margins increasing for CVLT over the last few quarters and that is another positive thing.
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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Bear Of The Day: CommVault Systems (CVLT)
CommValut Systems (CVLT - Free Report) is a Zacks Rank #5 (Strong Sell) and has the growth divergence that I always look for. That means I see a strong Zacks Growth Style Score and weak Zacks Value Style Score. Growth investors and value investors are looking for different things so I know I am on the right path when I see that. CVLT also recently beat the Zacks Consensus Estimate, yet it has the lowest Zacks Rank. Let’s take a look at why that is the case in this Bear of the Day article.
Description
CommVault provides Unified Data Management solutions for high-performance data protection, universal availability and simplified management of data on complex storage networks. The CommVault QiNetix platform, based on CommVault's Common Technology Engine, integrates Galaxy backup and recovery, snapshot management and recovery, remote replication, active data migration and archiving, e-mail compliance, enterprise service level management and reporting and storage resource management software solutions. The QiNetix unified approach is designed to allow customers to add integrate QiNetix components, at a fraction of the time, effort and money required by separate point products.
Earnings History
The first thing I do when I look at stock is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has been able to communicate to the market. A stock that consistently beats is one that has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of CVLT, I see four straight beats of the Zacks Consensus Estimate. This makes the case even more strange that it is a Zacks Rank #5 (Strong Sell).
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For CVLT, I see estimates fluctuating.
This quarter has moved from a $0.49 to $0.51.
Next quarter has seen a similar increase from $0.58 to $0.59.
The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is negative for those numbers.
I see 2021 moving from $2.56 to $2.54 over the last 60 days.
The 2022 number has moved from $3.15 to $3.11 over the same time horizon.
Negative movement in earnings estimates like that are the reason that this stock is a Zacks Rank #5 (Strong Sell).
The real read through is that if revisions like this cause a stock to move to a Zacks Rank #5 (Strong Sell) imagine what the other end of the spectrum must be seeing in terms of estimate revisions.
Valuation
The valuation for CVLT isn’t that bad when comparing the stock to the industry average. I see a forward PE of 30x and that is lower than the 26x industry average. The proce to book of 9,1x is right in line with the industry average and the price to sales of 5.1x is well below the 9.1x industry average. I see margins increasing for CVLT over the last few quarters and that is another positive thing.
Chart
CommVault Systems, Inc. Price and Consensus
CommVault Systems, Inc. price-consensus-chart | CommVault Systems, Inc. Quote
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
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