Commvault Systems Stored Up Strength; Holding Up Well Despite Market Rotation

Tech stocks have been taking it on the nose as the all-important Treasury bill interest rate rises at a rapid clip. Techs depend on capital to grow and higher rates hit them hard. Also, as the pandemic eases investors are rotating from tech stocks to “real world” stocks that provide goods and services. But companies still need to store data, and backup and recovery specialist Commvault Systems has been holding up well so far. On Tuesday, the IBD SmartSelect Composite Rating for Commvault Systems (CVLT) climbed the ladder to a near top-rung 96, up from 92 a day earlier.


The new score indicates the company is now outperforming 96% of all stocks in terms of the most important fundamental and technical stock-picking criteria. Winning stocks often have a 95 or higher rating in the early stages of a new price run, so that’s an important benchmark to look for when looking for the best stocks to buy and watch.

Commvault A Digital Vault, And More

As its name implies, Commvault acts as a digital vault for data communications. It also offers backup, recovery, duplication and other services.

On Jan. 27, Commvault reported 21% earnings growth for fiscal Q3, to 57 cents. Revenue grew 7% to $188 million. While others struggled in the middle of the pandemic, Commvault has reported profit and sales growth for the past three quarters.

“The strategic moves we made over the past two years are delivering results,” said Sanjay Mirchandani, Commvault CEO. “We have simplified how we do business, dramatically improved our execution, and are innovating faster than ever.”

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The Triton Falls, N.J.-based company’s stock has an 87 EPS Rating, which means its recent quarterly and longer-term annual earnings growth is outpacing 87% of all stocks.

Its Accumulation/Distribution Rating of B, on an A+ to E scale, shows moderate buying by institutional investors over the last 13 weeks.

Watchlist candidate Commvault Systems is currently forming a consolidation, with a 72.43 entry. Look for the stock to break out in volume at least 40% higher than normal.


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