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.

Trade-Ideas LLC identified

CommVault Systems

(

CVLT

) as a "dead cat bounce" (down big yesterday but up big today) 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 $32.4 million.
  • CVLT has traded 782,853 shares today.
  • CVLT is up 3% today.
  • CVLT was down 12% yesterday.

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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 566. Currently there are 4 analysts that rate CommVault Systems a buy, no analysts rate it a sell, and 7 rate it a hold.

The average volume for CommVault Systems has been 461,200 shares per day over the past 30 days. CommVault Systems has a market cap of $1.8 billion and is part of the technology sector and computer software & services industry. The stock has a beta of 1.40 and a short float of 5.8% with 2.71 days to cover. Shares are down 32.6% year-to-date as of the close of trading on Tuesday.

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TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates CommVault Systems as a

hold

. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, disappointing return on equity and weak operating cash flow.

Highlights from the ratings report include:

  • 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. To add to this, CVLT has a quick ratio of 1.96, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for COMMVAULT SYSTEMS INC is currently very high, coming in at 86.34%. Regardless of CVLT's high profit margin, it has managed to decrease from the same period last year.
  • Regardless of the drop in revenue, the company managed to outperform against the industry average of 11.5%. Since the same quarter one year prior, revenues slightly dropped by 3.9%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Current return on equity is lower than its ROE from the same quarter one year prior. This is a clear sign of weakness within the company. When compared to other companies in the Software industry and the overall market, COMMVAULT SYSTEMS INC's return on equity is below that of both the industry average and the S&P 500.
  • The share price of COMMVAULT SYSTEMS INC has not done very well: it is down 15.17% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, other than the push or pull of the broad market, we do not see anything in the company's numbers that may help reverse the decline experienced over the past 12 months. Despite the past decline, the stock is still selling for more than most others in its industry.

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