CLVT: Is It Time To Buy Puts? AI Bearish Signal

Clarivate is a global provider of transformative intelligence, offering enriched data, insights & analytics, workflow solutions, and expert services. The company serves customers in Academia & Government (A&G), Intellectual Property (IP), and Life Sciences & Healthcare (LS&H) markets. In the A&G segment, solutions such as 'Web of Science' and 'ProQuest One' support research and learning. The IP segment offers IP management software like 'IPfolio' and 'FoundationIP', along with patent and brand services, including 'CompuMark' trademark search solutions. The LS&H segment provides the 'Cortellis' suite for drug development. Clarivate differentiates itself by providing a combination of AI-enabled software and human insights, focusing on subscription and re-occurring revenue streams, improved sales execution, accelerated innovation, and solutions rationalization.

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CLVT's technical outlook is decidedly bearish. The stock has experienced a significant downtrend over the past 90 days, falling from approximately $4.51 on July 1st to $3.47 as of November 4th. The price is currently below its 21-day EMA of $3.62, its 50-day SMA of $3.90, and its 200-day SMA of $4.19, confirming the downtrend across multiple timeframes. Momentum indicators also signal weakness. The MACD is negative (-0.11) and below its signal line (-0.10), indicating bearish momentum. The RSI is at 44.42, suggesting the stock is not yet oversold, leaving room for further declines. The STOCHk is at 31.69, and STOCHd is at 26.35, indicating continued downward pressure. The ADX is at 23.33, suggesting a strengthening downtrend. Recent price action shows a failure to sustain any meaningful rallies, with consistent lower highs and lower lows. Given these factors, a further decline in CLVT's price is likely over the next 1–3 months. The absence of any positive divergence or reversal patterns reinforces this bearish outlook.

Clarivate's MD&A presents a mixed financial picture. Total `Revenues` for the three months ended September 30, 2025, were $623.1 million, a slight increase from $622.2 million in the same period of 2024. However, for the nine-month period, `Revenues` decreased by 2.9% from $1,893.7 million to $1,838.2 million. The company attributes this decrease primarily to the ScholarOne divestiture and product group wind-downs. `Adjusted EBITDA` decreased from $264.4 million to $252.4 million for the three-month period, and from $775.1 million to $747.2 million for the nine-month period. This resulted in a slight decrease in `Adjusted EBITDA margin` from 42.5% to 40.5% for the quarter, and from 40.9% to 40.6% for the nine-month period. `Net cash provided by operating activities` decreased by 7% from $505.3 million to $468.6 million for the nine months ended September 30, 2025, primarily due to higher restructuring costs. Despite this, the company believes that 'cash flow from operations, available cash on hand, borrowing capacity, and access to capital markets will be adequate to service debt, meet liquidity needs, and fund capital expenditures and other business plans for both the next 12 months and the foreseeable future'. The company's `total ACV` declined 3.4% year over year, primarily due to divestitures.

The Clarivate Q2 2025 earnings call struck a moderately bullish tone, highlighting improvements driven by their Value Creation Plan (VCP). CEO Matitiahu Shem Tov emphasized that they 'reported solid second quarter financial performance and delivered growth in our key metrics.' Organic ACV grew 1.3%, and recurring organic revenue grew almost 1%. CFO Jonathan Collins noted, 'Q2 represents the second quarter of sequential organic ACV and recurring revenue growth acceleration.' A&G showed strength with 2% organic ACV and subscription revenue growth, boasting a 96% renewal rate. The IP segment returned to organic growth, driven by AI innovation, with recurring revenue rising by about 1.5%. Life Sciences & Health also saw a return to organic ACV growth. While reaffirming the full year 2025 outlook, the company is undergoing a strategic review, with results expected to be communicated in February 2026. Though there are headwinds such as university funding cuts, management expressed confidence in their ability to navigate these challenges, citing the mission-critical nature of their products.

CLVT's financial performance presents a mixed, leaning bearish, picture. Revenue has fluctuated, starting at $621.2M in Q1 2024 and ending at $623.1M in Q3 2025, indicating stagnation rather than consistent growth. The gross profit ratio has also been variable, ranging from a low of 0.396 in Q4 2023 to a high of 0.672 in Q2 2025, suggesting inconsistent profitability. While operating cash flow has generally been positive, the most recent quarter shows $181.1M, after a period of positive cash flow generation, this is a positive sign. Total debt has remained relatively stable, starting at $4720.2M in Q1 2024 and ending at $4479.8M in Q3 2025. Despite positive operating cash flow in the last quarter, the inconsistent profitability and stagnant revenue raises concerns about CLVT's financial stability and future performance.

The company demonstrates a moderately bullish profile, characterized by solid revenue growth and improving profitability. Revenue has consistently increased, indicating strong market demand. The gross margin exhibits stability, suggesting effective cost management. Return on Equity (ROE) has improved, showcasing efficient capital allocation. While the Price-to-Earnings (P/E) ratio is elevated, it is potentially justified by the company's growth prospects. The Debt-to-Equity ratio has decreased, reflecting a healthier balance sheet and reduced financial risk. The current ratio is at a healthy level, implying sufficient liquidity to meet short-term obligations. Overall, the company presents a favorable combination of growth, profitability, and balance sheet strength, supporting a positive outlook for the next 12 months, although the high P/E ratio warrants close monitoring.