Commvault Systems closed Tuesday at $129.20, down 6% on the day — yet the options market is flashing its most bullish reading in recent memory, creating one of the more intriguing divergences in the software space this week.
The clearest signal is in options positioning, and it runs hard against the price action. The put/call ratio has collapsed to 0.41, almost two standard deviations below its 20-day average of 0.58 — meaning call volume is swamping puts by an unusually wide margin. That's the most aggressively bullish options setup CVLT has seen in months, sitting closer to the 52-week low of 0.17 than the high of 2.10. One reading: traders are using the dip to buy upside rather than hedge downside. The borrow market offers little in the way of corroboration for the bears — availability is running near 940%, meaning shares to borrow are plentiful. Cost to borrow ticked up to 0.53% on Tuesday, a new recent high, but in absolute terms it remains firmly in the "easy borrow" category. Short interest has drifted up roughly 2% on the week to 6.8% of the free float, around 3 million shares — notable but not extreme, and down nearly 9% from a month ago as the stock climbed.
The Street broadly agrees this stock deserves to be higher. The analyst consensus skews bullish, with several mid-tier firms having raised targets in mid-July — moves lifting price targets into the $175 range — and the mean target now near $161, implying roughly 25% upside from current levels. The bull case centres on Commvault's position as a recurring-revenue data protection and cyber-resilience platform, with AI-driven solutions increasingly relevant to enterprise compliance mandates. Forward earnings revisions have been exceptional: the 12-month forward EPS year-on-year increase factor scores in the 92nd percentile of the broader universe. PE has expanded to around 23.6x trailing and EV/EBITDA to roughly 18.6x, both up meaningfully over 30 days, though valuation remains the acknowledged weak spot in the thesis. Bears flag execution risk in the SaaS transition, competitive pressure from cloud-native vendors, and the possibility of multiple compression if growth disappoints. The short score of 47.7 is squarely in neutral territory, with a days-to-cover reading ranking in the 17th percentile — shorts are not positioned aggressively.
One piece of context worth noting on the peer comparison: Tuesday's 6% drop in CVLT did not happen in isolation. Close peers sold off sharply across the board — FROG fell 8.3%, RPD dropped 10.8%, TENB lost 7%, and RBRK fell 5%. That pattern suggests sector-wide selling pressure rather than a CVLT-specific negative. VRNS and PANW both held up comparatively better on the week, each gaining mid-single digits, pointing to some rotation within the security software complex.
The next scheduled catalyst is the Q2 earnings print on October 27. After the most recent quarterly report in late July, the stock fell nearly 20% in a single session before recovering roughly half that over the following week — a sharp reminder of how punishing misses can be at current multiples. The August report then produced a 1.6% gain the next day and a 13.5% five-day rally, resetting sentiment. With the put/call ratio at a near-extreme low and short interest having quietly rebuilt slightly into Tuesday's drop, how the options market repositions into October is the data point worth tracking most closely from here.
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