Should you sell your Coveo stock?

National Bank Financial analyst Richard Tse says Coveo Solutions (Coveo Solutions Stock Quote, Chart, News, Analysts, Financials TSX:CVO) will need to demonstrate a sustained growth reacceleration before the stock can materially re-rate higher, noting a softer outlook for the second half of fiscal 2026.

Coveo reported in-line FQ2/26 (CQ3) results on Oct. 30, posting revenue of $37.3-million versus Tse’s $36.9-million estimate (consensus: $36.8-million), including 15.2% SaaS subscription growth, while Adjusted EBITDA of $0.6-million topped his $0.1-million forecast (consensus: -$0.2-million). GenAI-related bookings continued to gain traction, representing over 35% of quarterly bookings, up from 25% in FQ4/25, with 2.5x year-over-year growth in customers and revenue tied to GenAI offerings.

Founded in 2004 and based in Quebec, Coveo provides an AI-powered, cloud-native SaaS platform that layers search, recommendations and personalization into enterprise digital experiences across commerce, service, workplace and web channels, serving clients in technology, financial services, retail, healthcare and manufacturing.

Tse flagged two headwinds behind his more cautious stance. First, growth is set to slow in the back half of FY26, with implied SaaS subscription growth of 11.4% in FQ3 and 10.4% in FQ4, down from 15.2% in FQ2.

Sales cycles are lengthening as deal sizes increase, and a lower-than-expected renegotiated renewal with Salesforce has pressured near-term momentum. While Tse views the Salesforce impact as a one-off, it was enough to “have us pausing on the name” following a 25% year-to-date share price gain.

With the outlook tempered, Tse downgraded Coveo to “Sector Perform” from “Outperform” and cut his DCF-based target to C$9.00 from C$11.50, now implying 3.4× EV/Revenue on FY26 estimates (was 4.5×).

Tse said Coveo should produce $0.1-million in Adjusted EBITDA on $148.1-million of revenue in fiscal 2026, improving to $7.4-million on $167.4-million in fiscal 2027.

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