Yahoo Finance The past year for Commvault Systems (NASDAQ:CVLT) investors has not been profitable
Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Commvault Systems, Inc. (NASDAQ:CVLT) have tasted that bitter downside in the last year, as the share price dropped 31%. That's disappointing when you consider the market declined 19%. The silver lining (for longer term investors) is that the stock is still 21% higher than it was three years ago. Furthermore, it's down 15% in about a quarter. That's not much fun for holders.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Commvault Systems
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Commvault Systems managed to increase earnings per share from a loss to a profit, over the last 12 months.
It's good to see it turn a profit, but we note it was reasonably close to profitability last year. And judging by the share price, the market is not too happy about it, either. Given the improvement, though, contrarian investors might want to take a closer look.
You can see below how EPS has changed over time (discover the exact values by clicking on the image).
It is of course excellent to see how Commvault Systems has grown profits over the years, but the future is more important for shareholders. This free interactive report on Commvault Systems' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We regret to report that Commvault Systems shareholders are down 31% for the year. Unfortunately, that's worse than the broader market decline of 19%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. Before spending more time on Commvault Systems it might be wise to click here to see if insiders have been buying or selling shares.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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