Coveo Solutions is still undervalued, analyst says

Its third quarter results are in the books and National Bank Financial analyst Richard Tse still thinks there is money to be made on Coveo Solutions (Coveo Solutions Stock Quote, Chart, News, Analysts, Financials TSX:CVO).

On February 10. CVO reported its Q3, 2025 results. The company posted Adjusted EBITDA of $600,000 on revenue of $34.0-million, a topline that was up 8%, year-over-year.

“Our third quarter performance underscores growing momentum across our business,” CEO Louis Têtu said. “Enterprises are increasingly recognizing that Search and AI-Relevance is critical to unlocking the business outcomes they are seeking in their AI projects in digital and generative experiences. We believed this year would see an inflection where enterprises moved from experimentation to adoption, and our third quarter is validation that we are tracking well on accelerating our revenue growth in the coming quarters.”

Tse says these results were about what he expected.

“Coveo reported essentially in-line FQ3 results with revenue of $34.0 mln vs our estimate of $33.5 mln (Consensus: $33.8 mln) with Adj. EBITDA of $0.6 mln vs. NBF at $0.4 mln (Consensus: $0.7 mln),” he wrote. “With respect to FQ4 and FY25 guidance, the Company narrowed its full year guidance to the lower end of its former range due in part from FX and fewer billing days. Despite that, a number of leading metrics (bookings and current SaaS Remaining Performance Obligations (cRPO)) suggests accelerating growth into FY26.”

In a research update to clients February 10, Tse maintained his “Outperform” rating and price target of $8.50 on Coveo.

The analyst thinks the company will post Adjusted EBITDA of $900,000 on revenue of $133.1-million in fiscal 2025. He expects Adjusted EBITDA of $7.7-million on revenue of $150.2-million in fiscal 2026.

“We continue to believe Coveo remains one of the few direct plays on AI in our coverage universe and with bookings and pipeline momentum building, we see accelerating growth into FY26, Tse concluded.