Stocks are under pressure this morning due partly to deepening concerns about highly speculative trading activity around certain soaring, short-squeezed stocks. Every sector closed red in the previous trading session and all major indices saw sharp declines. The VIX is also at its highest level since November, which could be signaling more turbulence ahead.
Tech giants Apple, Tesla and Facebook suffered losses in pre-market trading after reporting quarterly results. Experts have been calling for a breather for these and other big tech names. That’s why we’re turning our focus to lesser known small-cap tech stocks.
Today we are highlighting one small-cap tech stock with promising trajectory and a consensus Buy rating from the Wall Street pros covering it.
CommVault Systems (CVLT) offers software to back up, manage, protect and recover data, via both the cloud and on-site systems. The New Jersey based firm says its software makes it a leader in data resiliency. About 80% of CVLT revenues are on some sort of subscription basis, which is typically viewed as more stable and predictable.
In September, CommVault announced it would make several products – New Commvault Disaster Recovery, Commvault Backup & Recovery and Commvault Complete Data Protection – available to general customers. Disaster Recovery, for instance, lets customers quickly launch backups of their workloads in the event of an outage.
Of six analysts covering CVLT three call the stock a Strong Buy, putting it among Wall Street’s top small-cap tech stocks at the moment. There is one Buy rating, two Hold ratings and no Sell ratings for the stock. William Blair analyst Jason Ader (Outperform) likes that a higher percentage of software revenue now comes from cloud subscriptions.
“We continue to see a favorable risk/reward for the stock, and believe that the company’s deep technology portfolio, installed base, and recurring revenue profile continue to be underappreciated by investors,” he says.
John Freeman of CFRA, one of a few analyst outfits that use Strong Buy ratings gives one to CommVault. He cites a laundry list of points that back up the bull case, including “solid progress for CEO (Sanjay) Mirchandani’s turnaround plan,” the expansion of a Microsoft (MSFT) partnership, attractive valuation and “large conservative, loyal customers.” He adds that the company had $341 million in net cash as of June.
About 80% of CommVault Systems (CVLT) revenues are on some sort of subscription basis, which is typically viewed as more stable and predictable.
In September, CommVault announced it would make several products – New Commvault Disaster Recovery, Commvault Backup & Recovery and Commvault Complete Data Protection – available to general customers.
John Freeman of CFRA, one of a few analyst outfits that use Strong Buy ratings gives one to CommVault. He cites a laundry list of points that back up the bull case, including “solid progress for CEO (Sanjay) Mirchandani’s turnaround plan,” the expansion of a Microsoft (MSFT) partnership, attractive valuation and “large conservative, loyal customers.”
If you can stand a little risk, the rewards from small-cap tech stocks can be rich and CVLT seems like an attractive bet for 2021.
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