Cybersecurity and data protection specialist Commvault Systems (CVLT 4.24%) couldn't escape the stock market rout on Tuesday. Compounding the generally gloomy investor sentiment prevalent that day, an analyst lowered his price target on the company's equity.
A $35 change
The downgrading party was Truist Securities, in the person of pundit Junaid Siddiqui. That morning, Siddiqui significantly reduced his Commvault price target. He now believes the stock is worth $175 per share, down from his previous estimation of $210. Despite the chop, he maintained his buy recommendation.
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Siddiqui's latest Commvault analysis was part of a broader research update on cybersecurity stocks in advance of their quarterly earnings releases. Although the analyst remains bullish on the sector generally and Commvault specifically, he noted that investors seem to prefer artificial intelligence (AI) hardware stocks to industry plays these days.
Drilling down into Commvault's fundamentals, Siddiqui noted that the company is facing headwinds, as evidenced by its second-quarter performance, and that its margins have recently compressed.
NASDAQ: CVLT
Key Data Points
No crisis
Looking at how Commvault has performed lately and both its own and analyst expectations for the soon-to-be-reported third quarter, I don't see much for investors to worry about. The company is quite an effective operator, especially in its data protection niche, and if anything, demand for its services will only grow. I wouldn't be discouraged by the price target cut.
