Following its impressive fiscal second-quarter report in late October investors may want to take notice of CommVault Systems (CVLT) stock which currently sports a Zacks Rank #1 (Strong Buy) and lands the Bull of the Day.

CommVault Provides Unified Data Management solutions for high-performance data protection and has been taking advantage of a strengthening business environment as the Zacks Computer-Software Industry is currently in the top 26% of over 250 Zacks industries.

Strong Momentum

In addition to its Zacks Rank #1 (Strong Buy), CommVault’s stock has an “A” Zacks Style Scores grade for Momentum after beating Q2 top and bottom line expectations on Friday, October 31.

CommVault’s Q2 earnings of $0.70 per share beat the Zacks Consensus of $0.65 a share by 7%. More impressive, Q2 earnings soared 23% year over year with sales of $201 million topping estimates by 3% and rising 7% from the prior-year quarter.

CommVault is building a desirable customer base as recurring revenue of $158.2 million represented 84% of total revenue during the quarter and popped 12% YoY with CEO Sanjay Mirchandani stating the company's comprehensive data protection portfolio has never been more important in today’s increasingly difficult world.   

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Image Source: Zacks Investment Research

Stellar Growth

CommVault’s stock also sports an “A” Zacks Style Scores grade for Growth with earnings now forecasted to jump 13% in its current fiscal 2024 and climb another 8% in FY25 to $3.12 per share.

Even better, FY25 EPS projections would represent a very stellar 280% increase over the last five years with CommVault’s earnings at $0.82 per share in 2021. Plus, total sales are projected to be up 4% in FY24 and rise another 5% in FY25 to $861.27 million.

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Image Source: Zacks Investment Research

Bottom Line

CommVault is turning into a very appealing growth stock and considering the lofty premium many software companies can command in this regard, CVLT trades reasonably at a 23.3X forward earnings multiple. More reassuring, earnings estimates have begun to rise following the company’s strong Q2 results making now an ideal time to buy CommVault’s stock.

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