Financial Review: CommVault Systems (NASDAQ:CVLT) and Open Text (NASDAQ:OTEX)

CommVault Systems (NASDAQ:CVLT) and Open Text (NASDAQ:OTEX) are both mid-cap computer and technology companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, dividends, risk, institutional ownership, valuation, analyst recommendations and earnings.

Valuation & Earnings

This table compares CommVault Systems and Open Text”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CommVault Systems	$995.62 million	5.38	$76.11 million	$1.78	68.31
Open Text	$5.17 billion	1.62	$435.87 million	$1.91	17.38

Open Text has higher revenue and earnings than CommVault Systems. Open Text is trading at a lower price-to-earnings ratio than CommVault Systems, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for CommVault Systems and Open Text, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CommVault Systems	1	3	10	1	2.73
Open Text	0	10	3	1	2.36

CommVault Systems presently has a consensus target price of $194.64, indicating a potential upside of 60.08%. Open Text has a consensus target price of $39.42, indicating a potential upside of 18.72%. Given CommVault Systems’ stronger consensus rating and higher probable upside, research analysts clearly believe CommVault Systems is more favorable than Open Text.

Volatility & Risk

CommVault Systems has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500. Comparatively, Open Text has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Profitability

This table compares CommVault Systems and Open Text’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CommVault Systems	7.32%	31.53%	7.16%
Open Text	9.60%	23.44%	6.96%

Insider & Institutional Ownership

93.5% of CommVault Systems shares are owned by institutional investors. Comparatively, 70.4% of Open Text shares are owned by institutional investors. 1.0% of CommVault Systems shares are owned by insiders. Comparatively, 10.6% of Open Text shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

CommVault Systems beats Open Text on 8 of the 14 factors compared between the two stocks.

About CommVault Systems

Commvault Systems, Inc. provides data protection platform that helps customers to secure, defend, and recover their data in the United States and internationally. The company offers Commvault Backup and Recovery, a backup and recovery solution; Commvault Disaster Recovery, a replication and disaster recovery solution; Commvault Complete Data Protection, a data protection solution; and Metallic Data Protection as-a-service, which delivers enterprise-grade data protection as a service on a cloud platform, with advanced built-in security controls. It also provides Commvault HyperScale X, an easy-to-deploy scale-out solution; and Metallic Recovery Reserve, an easy button to adopt secure and scalable cloud storage in minutes. In addition, the company provides technology consulting, Ransomware recovery, education, and remote managed services. Further, it sells appliances that integrate the software with hardware for use in a range of business needs and use cases; and offers customer support, consulting, assessment and design, and installation services, as well as customer education and as-a-service under the Metallic brand. The company sells its products and services directly through its sales force, and indirectly through its network of distributors, value-added resellers, systems integrators, corporate resellers, and original equipment manufacturers to large enterprises, small or med-sized businesses, and government agencies. It supports customers in a range of industries, including banking, insurance and financial services, government, healthcare, pharmaceuticals and medical services, technology, legal, manufacturing, utilities, and energy. Commvault Systems, Inc. was founded in 1988 and is headquartered in Tinton Falls, New Jersey.

About Open Text

Open Text Corporation provides information management software and solutions. The company offers content services, which includes content collaboration and intelligent capture to records management, collaboration, e-signatures, and archiving; and operates experience cloud platform that provides customer experience and web content management, digital asset management, customer analytics, AI and insights, e-discovery, digital fax, omnichannel communications, secure messaging, and voice of customer, as well as customer journey, testing, and segmentation. It also provides cybersecurity cloud solutions to protect, prevent, detect, respond and quickly recover from threats across endpoints, network, applications, IT infrastructure and data, AI-led threat intelligence; and to protect critical information and processes through threat intelligence, forensics, identity, encryption, and cloud-based application security. In addition, the company offers business network cloud for digital supply chains and secure e-commerce ecosystems including digitize and automate procure-to-pay and order-to-cash processes; IT operations management cloud for automation and advancement of IT support and asset management; and analytics & AI cloud solutions that offers artificial intelligence with practical usage to provide organizations with actionable insights and better automation, such as visualizations, advanced natural language processing and understanding, and integrated computer vision capabilities. In addition, it provides application automation cloud, developers cloud, and services. Further, it has strategic partnerships with SAP SE, Google Cloud, Amazon AWS, Microsoft Corporation, Oracle Corporation, Salesforce.com Corporation, DXC Technology Company, Accenture plc, Capgemini Technology Services SAS, Deloitte Consulting LLP, Hewlett Packard Enterprises, and Tata Consultancy Services. Open Text Corporation was incorporated in 1991 and is headquartered in Waterloo, Canada.