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There's been a notable change in appetite for Commvault Systems, Inc. (NASDAQ:CVLT) shares in the week since its full-year report, with the stock down 18% to US$35.41. Revenues of US$671m arrived in line with expectations, although statutory losses per share were US$0.12, an impressive 65% smaller than what broker models predicted. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Commvault Systems after the latest results.
Taking into account the latest results, the nine analysts covering Commvault Systems provided consensus estimates of US$654.4m revenue in 2021, which would reflect a perceptible 2.5% decline on its sales over the past 12 months. Earnings are expected to improve, with Commvault Systems forecast to report a statutory profit of US$0.35 per share. Before this earnings report, the analysts had been forecasting revenues of US$687.7m and earnings per share (EPS) of US$0.48 in 2021. The analysts seem less optimistic after the recent results, reducing their sales forecasts and making a pretty serious reduction to earnings per share numbers.
Despite the cuts to forecast earnings, there was no real change to the US$47.71 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Commvault Systems, with the most bullish analyst valuing it at US$55.00 and the most bearish at US$42.00 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that sales are expected to reverse, with the forecast 2.5% revenue decline a notable change from historical growth of 4.0% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 12% next year. It's pretty clear that Commvault Systems' revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Commvault Systems. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Commvault Systems analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Commvault Systems .
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