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CommVault Systems (CVLT) Marked As A Barbarian At The Gate

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified CommVault Systems ( CVLT) as a "barbarian at the gate" (strong stocks crossing above resistance with today's range greater than 200%) candidate. In addition to specific proprietary factors, Trade-Ideas identified CommVault Systems as such a stock due to the following factors:

  • CVLT has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $49.4 million.
  • CVLT has traded 904,767 shares today.
  • CVLT traded in a range 245.9% of the normal price range with a price range of $4.69.
  • CVLT traded above its daily resistance level (quality: 7 days, meaning that the stock is crossing a resistance level set by the last 7 calendar days. The resistance price is defined by the Price - $0.01 at the time of the signal).

Stocks matching the 'Barbarian at the Gate' criteria are worthwhile stocks to watch for a variety of factors including historical back testing and volatility. Trade-Ideas targets these opportunities because the stock is exhibiting an unusual behavior while displaying positive price action. In this case, the stock crossed an important inflection point; namely, 'resistance' while at the same time the range of the stock's movement in price is more than twice its normal size. This large range foreshadows a possible continuation as the stock moves higher.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in CVLT with the Ticky from Trade-Ideas. See the FREE profile for CVLT NOW at Trade-Ideas

More details on CVLT:

CommVault Systems, Inc., together with its subsidiaries, provides data and information management software applications and related services primarily in North America, Europe, Australia, and Asia. CVLT has a PE ratio of 55.1. Currently there are 7 analysts that rate CommVault Systems a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for CommVault Systems has been 535,900 shares per day over the past 30 days. CommVault Systems has a market cap of $3.2 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 0.70 and a short float of 4.9% with 4.55 days to cover. Shares are down 3.6% year-to-date as of the close of trading on Monday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates CommVault Systems as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and expanding profit margins. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself.

Highlights from the ratings report include:

  • The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 20.1%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • CVLT has no debt to speak of therefore resulting in a debt-to-equity ratio of zero, which we consider to be a relatively favorable sign. Along with this, the company maintains a quick ratio of 2.65, which clearly demonstrates the ability to cover short-term cash needs.
  • COMMVAULT SYSTEMS INC has improved earnings per share by 20.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, COMMVAULT SYSTEMS INC increased its bottom line by earning $1.10 versus $0.68 in the prior year. This year, the market expects an improvement in earnings ($1.77 versus $1.10).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Software industry average. The net income increased by 24.9% when compared to the same quarter one year prior, going from $13.90 million to $17.35 million.
  • The gross profit margin for COMMVAULT SYSTEMS INC is currently very high, coming in at 87.23%. It has increased from the same quarter the previous year. Despite the strong results of the gross profit margin, CVLT's net profit margin of 12.23% significantly trails the industry average.

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