Evaluating COMMVAULT SYSTEMS INC (NASDAQ:CVLT) using Mark Minervini’s winning stock formula

Our stock screener has spotted COMMVAULT SYSTEMS INC (NASDAQ:CVLT) as a stocks which checks several boxes as specified by Mark Minervini. We will dive into an analysis below.

Checking the Minervini Trend Template.

The Minervini Trend Template is a set of technical criteria designed to identify stocks in strong uptrends. We can check all the boxes for CVLT:

• ✔ Relative Strength is above 70.
• ✔ Current price is within 25% of it's 52-week high.
• ✔ Current price is at least 30% above it's 52-week low.
• ✔ The current price is above the 50-, 150- and 200-day SMA price line.
• ✔ The SMA(200) is trending upwards.
• ✔ The SMA(150) is above the SMA(200)
• ✔ The SMA(50) is above the SMA(150) and the SMA(200)

Some of the high growth metrics of CVLT highlighted

To evaluate a stock's growth potential, ChartMill utilizes a High Growth Momentum Rating (HGM) on a scale of 0 to 10. This assessment considers various growth and profitability aspects, like EPS and revenue growth, accelleration, surprises and revisions. CVLT has achieved a 4 out of 10:

Earnings Momentum

• The earnings per share (EPS) of CVLT have shown positive growth on a quarter-to-quarter (Q2Q) basis, with a 20.51% increase. This reflects the company's ability to improve its profitability over time.
• Accelerating EPS growth for CVLT: the current Q2Q growth of 20.51% exceeds the previous quarter Q2Q growth of 18.57%.
• Sales growth accelerated for 3 quarters in a row.
• With consistent quarter-to-quarter (Q2Q) revenue growth of 21.13%, CVLT exemplifies its ability to generate increased sales and revenue streams. This growth signifies the company's strong business performance and its potential for continued growth.
• Accelerating Sales growth for CVLT: the current Q2Q growth of 21.13% exceeds the previous quarter Q2Q growth of 16.06%.
• Sales acceleration happened 3 quarters in a row.
• CVLT has seen a 5.62% change in the average next Quarter EPS Estimate by analysts over the last 3 months, signaling the shifting perception of the company's EPS outlook.
• With a track record of beating EPS estimates in the last 4 quarters, CVLT showcases its consistent ability to deliver earnings surprises. This reflects the company's strong execution and its competitive position in the market.

Profitability & Financial Strength

• In terms of Return on Equity(ROE), CVLT is performing well, achieving a 59.49% ratio. This highlights the company's effective allocation of shareholder investments and signifies its commitment to maximizing returns.
• With a Debt/Equity ratio of 0.0, CVLT demonstrates prudent financial management.

Strong Market Performance

• CVLT has achieved an impressive Relative Strength (RS) rating of 95.28, showcasing its ability to outperform the broader market.

How do we evaluate the setup for CVLT?

ChartMill also assigns a Setup Rating to each stock. This rating, on a scale of 0 to 10, reflects the degree of consolidation observed based on short-term technical indicators. Currently, CVLT exhibits a 3 setup rating, indicating its consolidation status in recent days and weeks.

Although CVLT has an excellent technical rating, it does not present a decent entry opportunity at the moment. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first.

For an up to date full technical analysis you can check the technical report of CVLT

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Disclaimer

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.