Critical Analysis: Commvault (CVLT) versus Datawatch (DWCH)

Commvault (NASDAQ: CVLT) and Datawatch (NASDAQ:DWCH) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.

Insider and Institutional Ownership

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90.1% of Commvault shares are held by institutional investors. Comparatively, 38.4% of Datawatch shares are held by institutional investors. 13.4% of Commvault shares are held by company insiders. Comparatively, 9.4% of Datawatch shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Commvault has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Datawatch has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Profitability

This table compares Commvault and Datawatch’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Commvault -8.30% 0.32% 0.18%
Datawatch -6.89% -3.81% -2.56%

Analyst Ratings

This is a summary of current ratings and recommmendations for Commvault and Datawatch, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Commvault 0 3 7 0 2.70
Datawatch 0 1 2 0 2.67

Commvault currently has a consensus price target of $73.00, indicating a potential upside of 2.74%. Datawatch has a consensus price target of $14.00, indicating a potential upside of 57.30%. Given Datawatch’s higher probable upside, analysts clearly believe Datawatch is more favorable than Commvault.

Earnings and Valuation

This table compares Commvault and Datawatch’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Commvault $650.52 million 4.91 $540,000.00 $0.05 1,421.00
Datawatch $36.26 million 3.03 -$3.99 million ($0.11) -80.91

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

Summary

Commvault beats Datawatch on 11 of the 13 factors compared between the two stocks.

About Commvault

Commvault Systems, Inc. provides data and information management software applications and related services in the United States and internationally. The company's software suite contains solutions that are built on a single unified code base and platform to protect, manage, and access data and information. It offers data protection, backup, and recovery software solutions that allow for the backup of databases, files, applications, endpoints, and virtual machines with according to data type and recovery profile; and help to optimize storage with deduplication, recover data, and leverage reports to improve backup and recovery processes. The company also provides cloud and infrastructure management software solutions that provide a way to manage storage hardware and virtual infrastructure; and retention and compliance software solutions that provide content based retention, enterprise search and e-discovery, email archiving, data loss prevention, and secure file sharing services. In addition, it offers customer support, consulting, assessment and design, installation, and training services, as well as implementation and post-deployment, and education services. The company sells its software and services directly to large enterprises, small and medium sized businesses, and government agencies, as well as indirectly through a network of value-added reseller partners, systems integrators, corporate resellers, and original equipment manufacturers. It licenses its software applications to customers in industries, such as banking, insurance and financial, government, healthcare, pharmaceuticals and medical, technology, legal, manufacturing, utilities, and energy. The company has strategic relationships and partnerships with Atos, Cisco, Citrix, Fujitsu, HP, Microsoft, Oracle, SAP, VMware, and INFINIDAT. Commvault Systems, Inc. was incorporated in 1996 and is headquartered in Tinton Falls, New Jersey.

About Datawatch

Datawatch Corporation designs, develops, markets, and distributes business computer software products to self-service data preparation and visual data discovery markets in the United States and internationally. Its software solutions allow organizations to access, analyze, and visualize their information. The company's products include Datawatch Monarch, a self-service data preparation tool to explore, manipulate, and merge new data sources; Datawatch Monarch Swarm, a browser-based platform offers team-driven data preparation and centralized data marketplace for speed collaboration; Datawatch Panopticon designed for situations for data analysis; and Datawatch Report Mining Server, a solution for data preparation capabilities. It also provides implementation and support of its software products, as well as training on their use and administration. The company sells its products to end-users through distributors, value-added resellers, original equipment manufacturers, and strategic partners. Datawatch Corporation was founded in 1985 and is headquartered in Bedford, Massachusetts.

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