2014 has seen the highs and lows of many stocks, CommVault (NASDAQ: CVLT) falling in the latter. The Simpana data management software even though enjoyed all-time highs back in September but its overall performance map shows the company suffered a 42% decline since the beginning of this year. Now the question is could certain measures be taken to save the falling stock. The CommVault (NASDAQ: CVLT)’s Simpana suite is made for data protection, mobile access, disaster recovery, cloud services and also storage optimization, a perfect package for business needs.
Hence its demand was on the rise between 2007 and 2014, with expectations of a dramatic rise from $586 million to $1 billion in the coming years. This year the stock maintained their high position till April by 30% until it took a fall by the fourth quarter. A year’s overview shows a 7.8% fall in GAAP adjusted profit, a $0.32 per share and a rise of 13% in revenue resulting in $156.8 million.
According to the non-GAAP earning figures which revealed the worst numbers in three years for growth, and things showed no improvement in the first 2 quarters of 2014 either. In the first quarter of 2014, the estimates were met but in the second quarter, revenue estimates were missed by $7 million and price per share fell by ten cents. The software revenue which makes up 46% of the total company revenue fell by 2% within a year.
The services revenues were up by 15% whereas the revenues from company contracts and deals also declined by 5% in a year, while its average amount also went down to $295000 from $356000. Analysts at this stage expect CommVault (NASDAQ: CVLT) to produce a revenue of $668 million for 2014, with a 14% growth from previous year. This might be a hard target but not impossible as the company is known to make its higher numbers in the second half of the year.
This translates into $60 million more in revenues within the second half. Another factor to determine whether the problem lies within CommVault (NASDAQ: CVLT) or the industry in general needs to be reviewed. To gain a fair picture of that we will look at within a 5 year time span of CommVault (NASDAQ: CVLT)’s competitors, CA (NASDAQ:CA), Symantec (NASDAQ:SYME) and EMC (NYSE:EMC) were analysed.
When looking at the top line growth CommVault (NASDAQ: CVLT) steals the show but it hasn’t been this lucky in other spheres. In terms of market cap, P/E (ttm) and Operating Margin, CommVault (NASDAQ: CVLT) doesn’t show very impressive figures. But these figures could be translated as slowing pace with the data software. But CommVault (NASDAQ: CVLT) also came out and admitted in making mistakes throughout the year.
Most important the understaffed sales team in North America, which led to a decline in sales in that region. A shift from on-premise to cloud based solutions caused the company 18% more than the usual operating expense. The company is set on earning their $1 billion plan within the next three years, with consistent growth and sustainability. Analysts view these objectives as hard to achieve but time will reveal what actually happens.