Cellebrite DI Ltd. (CLBT): A Bull Case Theory
A female engineer in a datacenter, wearing a headset, monitoring digital data.
Cellebrite DI Ltd. (CLBT) is a global leader in digital intelligence solutions, providing law enforcement, government, and enterprise clients with mission-critical tools for collecting, reviewing, analyzing, and managing digital evidence. The company's core Collect & Review (C&R) segment, which enables field and lab personnel to extract digital data from mobile devices and cloud platforms, accounts for over 70% of revenue and drives 25%+ operating margins.
CLBT's differentiated offering—anchored by proprietary UFED and Premium tools—is used by over 6,700 public sector agencies across 140+ countries, creating a sticky customer base with high recurring revenue. The company is undergoing a platform shift from perpetual licenses to SaaS subscriptions, with 48% of ARR now tied to subscription contracts and overall ARR growing 27% year-over-year. This transition enhances visibility and margin profile, pushing toward a 20%+ FCF margin and strong operating leverage.
CLBT's industry-wide leadership is expanding into end-to-end investigative workflows with its Review and Investigate segments, supported by product bundling and growing customer demand for integrated, cloud-based solutions. While short-term growth is constrained by public sector budget cycles and a normalization post-COVID surge, CLBT's robust pipeline, rising penetration in developed markets, and expansion into emerging markets support durable mid-teens ARR growth.
Its clean balance sheet and improving cash conversion position it for capital returns and/or strategic acquisitions. Trading at under 4x EV/2026 EBITDA, CLBT remains undervalued relative to high-growth SaaS peers. With improving mix, recurring revenue momentum, and mission-critical positioning, CLBT offers investors a compelling asymmetric opportunity in the government-focused software landscape.
Previously, we covered a bullish thesis on DLocal Limited (DLO) by Oliver | MMMT Wealth in March 2025, which highlighted the company's unique positioning in emerging market payments, stabilizing take rates, and improving transaction diversification. The company's stock price has appreciated by approximately 5.33% since our coverage. This is because the thesis played out with signs of operational recovery. The thesis still stands as emerging markets continue to digitize. Topsecretstocks shares a similar view on Cellebrite but emphasizes recurring revenue visibility and SaaS transition benefits.
Cellebrite DI Ltd. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 30 hedge fund portfolios held CLBT at the end of the first quarter which was 34 in the previous quarter. While we acknowledge the potential of CLBT as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None.
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