GICS Sector : Technology
Clarivate Plc, an information services and analytics company, provides structured information and analytics for discovery, protection, and commercialization of scientific research, innovations, and brands.It offers Web of Science products and services, such as Web of Science, InCites, Journal Citation Reports, EndNote, ScholarOne, Converis, Publons, and Kopernio to organizations that plan, fund, implement, and utilize research; and Life Sciences products, including Cortellis and Newport Integrity for pharmaceutical and biotechnology companies to support research, market intelligence, and competitive monitoring in connection with the development and commercialization of new drugs.The company also provides Derwent products, which include Derwent Innovation, Techstreet, and IP Professional Services that enables its customers to evaluate the novelty of potential new products, confirm freedom to operate with respect to their product design, help them secure patent protection, assess the competitive technology landscape, and ensure that their products comply with required industry standards; CompuMark products, such as trademark screening, searching, and watching products and services for businesses and law firms; and MarkMonitor products, which helps enterprises to establish, manage, optimize, and protect their online presence.
Clarivate reported Q3 revenue of $623 million, essentially flat year-over-year, and a net loss of $28 million. The company's EPS came in at $0.18, beating analyst estimates of $0.16. Operating cash flow was $181 million, driven by adjusted EBITDA and working capital. The company also reported a significant improvement in annual contract value (ACV), which rose 1.6% sequentially, driven by 2% ACV growth across Academia & Government and Life Sciences & Health.
Publication Date: Nov -03
The Academia & Government segment achieved 2% ACV growth, driven by the transition to subscription-based revenue streams, with the A&G subscription mix now at 93% compared to 81% last year. The Life Sciences & Health segment also reported 2% ACV growth, driven by the introduction of new products and advancements in AI integration. The Intellectual Property segment is expected to return to sustainable growth, driven by investments in AI-based products and service innovation.
Clarivate raised its revenue guidance to $2.44 billion at the midpoint of the new range, driven by organic growth and the weaker US dollar. The company expects flat organic growth, with growth in recurring revenues offsetting the decline in transactional business. The divestitures of Valipat and ScholarOne are expected to lower revenue by $40 million and profit by $20 million. Analysts estimate next year's revenue growth at -1.9%.
Clarivate's valuation metrics indicate a relatively low P/E Ratio of -5.74 and a P/S Ratio of 0.9. The company's EV/EBITDA ratio is 8.88, indicating a moderate level of leverage. The Net Debt / EBITDA ratio is 5.76, which is relatively high. The company's ROIC is -0.43%, and ROE is -7.89%, indicating a challenging profitability environment. As the company continues to invest in AI and innovation, its valuation multiples will be closely watched to assess its growth prospects.
With a Free Cash Flow Yield of 14.91%, Clarivate's shares may offer an attractive return profile for investors. However, the company's high Net Debt / EBITDA ratio and challenging profitability environment are potential risks. As the company executes its value creation plan and drives innovation, investors will be watching to see if the company's growth prospects can offset its valuation multiples.
Clarivate Presents Cortellis Regulatory AI Assistant to Cut Through Complexity in Safety and Compliance
Dec -04
Clarivate Launches Derwent Patent Monitor to Enable Fast and Accurate Decision-making with AI
Nov -24
Clarivate Plc (CLVT) Presents at Global Technology, Internet, Media & Telecommunications Conference 2025 Transcript
Nov -19
Clarivate to Present at the RBC Capital Markets Global Technology, Internet, Media and Telecommunications Conference on November 19
Nov -13
Clarivate Announces Highly Cited Researchers 2025 List
Nov -12
Is Clarivate Stock a Buy After a Member of the Board of Directors Bought Shares for $2.5 Million?
Nov -08
Fujifilm Selects IPfolio from Clarivate
Nov -06
Clarivate: Downgrade To Hold As The Recovery Momentum Is Not Showing Up
Nov -01
Academia and Government segment growth of 1.8% driven by increasing research funding, government initiatives for innovation, and adoption of digital solutions for knowledge management. Additionally, growing demand for evidence-based policy making and research collaboration fuels growth in this segment.
Clarivate Plc's Intellectual Property segment growth of 1.5% is driven by increasing demand for patent and trademark protection, expansion of research and development activities, and growing adoption of intellectual property management software. Additionally, the rise of innovation and entrepreneurship, particularly in the technology and life sciences sectors, contributes to the segment's growth.
Clarivate Plc's Life Sciences and Healthcare segment growth of 2.2% is driven by increasing demand for pharmaceutical R&D, personalized medicine, and healthcare analytics. Additionally, the rise of precision medicine, gene editing, and digital health technologies are contributing to growth. Furthermore, the need for efficient clinical trials, regulatory compliance, and intellectual property protection also fuels segment expansion.
A research intelligence platform that provides access to a curated collection of high-impact journals, conference proceedings, and books in the sciences, social sciences, and arts and humanities.
A suite of life science intelligence solutions that provide insights and analytics on drugs, patents, and clinical trials.
A patent search and analytics platform that provides access to a comprehensive database of patent information.
A reference management tool that helps researchers organize, collaborate, and publish research papers.
A browser extension that provides one-click access to full-text articles and PDFs.
A research analytics platform that provides insights and benchmarking tools for research institutions and funding agencies.
Clarivate Plc operates in a niche market with limited substitutes, but the threat of substitutes is still present due to the evolving nature of the industry.
Clarivate Plc's customers are largely institutional and have limited bargaining power, giving the company an upper hand in negotiations.
Clarivate Plc relies on a diverse range of suppliers, which reduces the bargaining power of individual suppliers, but the company still needs to negotiate with them.
The intellectual property and patent landscape in Clarivate Plc's industry creates a barrier to entry for new entrants, reducing the threat of new competition.
The intellectual property and analytics industry is highly competitive, with several established players, leading to a high intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 44.19% |
| Debt Cost | 6.79% |
| Equity Weight | 55.81% |
| Equity Cost | 10.17% |
| WACC | 8.67% |
| Leverage | 79.19% |
Value: 4.9
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