Coveo Solutions (CVO) AI Stock Analysis

• Market Cap: C$703.27M
• Dividend Yield: N/A
• Average Volume (3M): 173.02K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.37
• Revenue Growth: 12.20%
• EPS Growth: -8.46%
• Country: CA
• Employees: 743
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.07
• Shares Outstanding: 55,794,000
• 10 Day Avg. Volume: 192,042
• 30 Day Avg. Volume: 173,021
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$10.50
• Price Target Upside: 75.00% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 60 Neutral
• Price Target: C$6.50 ▲(8.33% Upside)

Coveo Solutions' overall stock score is primarily influenced by its strong earnings call performance, highlighting revenue growth and strategic expansions. However, technical indicators suggest short-term weakness, and valuation concerns due to negative profitability weigh on the score. Financial performance shows potential but requires improvements in profitability and return on equity.

Positive Factors

Revenue Growth

Coveo's strong revenue growth, particularly in SaaS and total revenue, indicates robust demand for its solutions and effective market penetration, supporting long-term business expansion.

Generative AI Expansion

The rapid growth in generative AI solutions positions Coveo as a leader in this emerging field, enhancing its competitive edge and opening new revenue streams.

Commerce Segment Success

The success in the commerce segment, driven by strategic partnerships, underscores Coveo's ability to capture market share and diversify its revenue base, ensuring sustainable growth.

Negative Factors

Profitability Challenges

Ongoing profitability issues highlight operational inefficiencies that could hinder long-term financial health and investor confidence if not addressed.

Salesforce Contract Renegotiation Impact

The impact of the Salesforce contract renegotiation on recurring revenue growth could signal challenges in maintaining customer retention and revenue stability.

Qubit Platform Revenue Decline

The decline in Qubit Platform revenue suggests potential product obsolescence or market saturation, which could affect future revenue streams if not countered by innovation.

Coveo Solutions Business Overview & Revenue Model

Company Description

Coveo Solutions Inc. provides applied artificial intelligence (AI) solutions. Its cloud-native, multi-tenant software as a service (SaaS) platform is the intelligence layer that injects search, recommendations, and personalization solutions into digital experiences to provide connected relevance for various-use cases across commerce, service, website, and workplace applications. It serves high tech, healthcare, manufacturing, financial services, and telecommunication industries. Coveo Solutions Inc. has strategic technology partnerships with Adobe, SAP, Salesforce, ServiceNow, Zendesk, Sitecore, AppDirect, and commercetools. The company was incorporated in 2004 and is headquartered in Quebec, Canada.

How the Company Makes Money

Coveo generates revenue primarily through a subscription-based model, offering various licensing options for its software solutions. Key revenue streams include recurring subscription fees from clients who utilize its cloud-based platform, as well as professional services such as implementation, training, and ongoing support. The company also benefits from strategic partnerships with technology providers and integrators, enhancing its market reach and enabling cross-selling opportunities. Additionally, Coveo may engage in performance-based pricing arrangements, where fees are tied to the success metrics achieved by their clients using Coveo's solutions.

Coveo Solutions Financial Statement Overview

Summary

Coveo Solutions demonstrates strong revenue growth and gross profit margins, which are positive indicators for future potential. However, the company faces challenges with profitability and return on equity, which need to be addressed to enhance financial health. The balance sheet remains stable with low leverage, and cash flow improvements are promising, but further alignment with profitability is needed.

Income Statement

Coveo Solutions shows a consistent revenue growth trend with a TTM growth rate of 2.5%. Gross profit margins are strong at approximately 78%, indicating efficient cost management. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins, reflecting ongoing operational challenges.

Balance Sheet

The company's balance sheet is stable with a low debt-to-equity ratio of 0.06, suggesting conservative leverage. However, the negative return on equity indicates that the company is not generating sufficient returns on shareholders' investments, which could be a concern for investors.

Cash Flow

Coveo Solutions has shown significant improvement in free cash flow growth, with a TTM growth rate of 44.8%. The operating cash flow to net income ratio is positive, indicating some level of cash generation from operations. However, the free cash flow to net income ratio suggests that cash flow is not yet fully aligned with profitability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	136.60M	133.27M	126.09M	112.00M	86.49M	64.86M
Gross Profit	107.06M	104.88M	98.45M	85.33M	65.03M	48.45M
EBITDA	-8.04M	-5.06M	-12.20M	-30.32M	249.60M	-468.47M
Net Income	-22.70M	-13.75M	-23.61M	-39.73M	418.28M	-600.02M
Balance Sheet
Total Assets	222.60M	230.36M	275.88M	308.82M	345.50M	194.04M
Cash, Cash Equivalents and Short-Term Investments	128.47M	124.75M	166.59M	198.45M	223.07M	131.87M
Total Debt	7.28M	7.46M	9.04M	10.87M	13.09M	209.84M
Total Liabilities	100.39M	103.45M	97.36M	90.28M	90.06M	1.19B
Stockholders Equity	122.21M	126.91M	178.52M	218.53M	255.44M	-999.08M
Cash Flow
Free Cash Flow	13.81M	9.54M	3.08M	-7.85M	-37.57M	2.19M
Operating Cash Flow	15.14M	11.07M	4.20M	-6.26M	-35.42M	5.78M
Investing Cash Flow	-1.33M	-1.53M	-1.12M	-2.27M	36.62M	30.71M
Financing Cash Flow	-53.74M	-50.81M	-35.59M	-2.43M	163.40M	2.18M

Coveo Solutions Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CVO, the sentiment is Negative. The current price of 6 is below the 20-day moving average (MA) of 7.96, below the 50-day MA of 8.54, and below the 200-day MA of 7.29, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 23.50 is Positive, neither overbought nor oversold. The STOCH value of 56.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CVO.

Coveo Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
CVO	―	C$703.27M	―	-18.09%	―	12.20%	-8.46%
STC	―	C$246.31M	-35.31	-1.99%	―	-1.46%	40.89%
DND	―	C$444.00M	―	―	1.46%	2.47%	19.37%
TIXT	―	$1.65B	―	-20.44%	―	5.06%	-638.59%
PLUR	―	C$16.10M	-1.05	―	―	5.61%	72.77%

Coveo Solutions Corporate Events

Coveo Solutions Earnings Call: Growth Amid Challenges

Coveo Solutions, Inc. recently held its earnings call, revealing a mixed sentiment among stakeholders. The company showcased significant achievements in revenue growth acceleration, generative AI expansion, and commerce segment success. However, challenges such as Salesforce contract renegotiation, deal delays, and a decline in Qubit platform revenue were also highlighted. Despite these hurdles, Coveo demonstrated resilience by maintaining its adjusted EBITDA guidance.

Coveo Solutions Surpasses Revenue Guidance with Strong AI and Commerce Growth

Coveo Solutions reported a robust second quarter for fiscal year 2026, with SaaS subscription revenue reaching $35.9 million, surpassing guidance and marking a 15% increase from the previous year. The company’s core platform saw a 17% growth, and its commerce use case, bolstered by an expanding partnership with SAP, remains its fastest-growing segment. Generative AI solutions also showed significant momentum, contributing to over 35% of new business bookings and a 2.5x increase in customer and revenue growth year-over-year. Despite a net loss of $4.4 million, Coveo’s strategic focus on AI and commerce solutions is driving substantial business value and recognition, including the SAP Global Customer Experience Award.

The most recent analyst rating on (TSE:CVO) stock is a Hold with a C$8.50 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.

Coveo Solutions Confirms Board Elections and Auditor Appointment at 2025 AGM

Coveo Solutions announced the results of its 2025 Annual General Meeting of Shareholders, where all seven nominees for the board of directors were elected with overwhelming support. Additionally, PricewaterhouseCoopers LLP was appointed as the auditor for the upcoming year. This announcement reinforces Coveo’s stable governance structure and its commitment to maintaining strong operational oversight, which is crucial for its continued leadership in the AI-Relevance industry.

The most recent analyst rating on (TSE:CVO) stock is a Hold with a C$9.50 price target. To see the full list of analyst forecasts on Coveo Solutions stock, see the TSE:CVO Stock Forecast page.