Mizuho has revised down its price target on CommVault Systems (NASDAQ: CVLT) to $140.00 from $180.00, though the firm left its Outperform rating intact. The change comes after CommVault posted third-quarter results in which total net new annual recurring revenue (ARR) amounted to $39 million - below the management range of roughly $40-45 million.
The analyst noted the shortfall in net new ARR was largely driven by a larger proportion of software-as-a-service (SaaS) bookings within net new ARR. That SaaS mix carries lower average selling prices, Mizuho said, and the firm also cited a lengthening of duration on new term-based deals as a contributing factor.
CommVault has marginally lowered its full-year ARR guidance, which prompted Mizuho to reevaluate its valuation assumptions. The stock moved sharply lower after the earnings release - Mizuho observed a 31% drop following the report. At the time one market snapshot showed the share price at $89.13, well off its 52-week high of $200.68, and InvestingPro data within the original report noted the company appeared undervalued based on a Fair Value assessment.
Financial results for the quarter included an earnings per share (EPS) of $1.17, which beat the consensus forecast of $0.98 by 19.39%. Revenue came in at $314 million, beating the anticipated $299.05 million. Even with those upside figures, the stock experienced a steep decline in pre-market trading, falling 33.65% to $101.96 from a previous close of $129.36.
Despite the ARR shortfall and the guidance adjustment, Mizuho continues to regard CommVault as a leading vendor in data backup, recovery, and cyber-resilience. The analyst expects continued healthy adoption of the platform and projects subscription ARR growth in the mid-20s for fiscal year 2026.
Investors and market participants will be watching how the mix shift toward SaaS bookings and the longer durations on term deals affect revenue composition and future ARR growth. No new mergers or acquisitions were reported in the company’s recent disclosures, and the updates did not include any analyst upgrades or downgrades beyond the pricing action by Mizuho.
Given the combination of an ARR miss relative to company guidance, a modest reduction in full-year ARR expectations, and large intraday share price moves after the earnings release, market participants face a complex signal: CommVault delivered EPS and revenue beats while simultaneously reporting subscription trends and guidance that prompted a reassessment of valuation.