Bitcoin price today: falls to 2-week low below $113k ahead of Fed Jackson Hole
On Wednesday, Bernstein analysts increased their price target for Confluent Inc (NASDAQ:CFLT) shares to $35 from the previous $33, while maintaining an Outperform rating. According to InvestingPro data, Confluent has shown impressive momentum with a 49% gain over the past six months and maintains a strong market capitalization of $9.87 billion. This decision follows Confluent’s robust performance in the fourth quarter of 2024, which saw the company surpassing subscription revenue expectations and reporting significant cloud revenue growth.
Confluent’s fourth quarter earnings showed a subscription revenue beat of 2.1% compared to the midpoint guidance, with cloud revenue exceeding consensus by 5.2%. The company has maintained strong revenue growth of 25% year-over-year, as reported by InvestingPro, which offers comprehensive analysis through its Pro Research Reports covering over 1,400 US stocks. The positive results have set a strong foundation for the first quarter and the full year of 2025, with revenue guidance aligning with consensus expectations. Notably, cloud revenue is projected to constitute approximately 57-58% of subscription revenue, offering a roughly 25% upside from the consensus estimate of 55.8%.
The company’s financial achievements extended beyond revenue, as Confluent marked 2024 as its first non-GAAP profitable year. With a healthy current ratio of 4.24 and strong gross profit margins of 73%, the company shows solid financial fundamentals. Management has reiterated their commitment to expanding margins and reducing dilution. They anticipate that all remaining pre-IPO options will be vested by mid-2025 and aim to keep dilution below 2% over the long term.
In light of the company’s performance and industry trends, Bernstein analysts have adjusted their revenue estimates slightly downward by about 25%, reflecting a broader slowdown in the cloud sector during the first half of the year, attributed to the impact of AI. The revised price target of $35 is supported by a 50/50 weighted Discounted Cash Flow analysis, incorporating an 11% Weighted Average Cost of Capital and a 3% terminal growth rate. Additionally, the Price/Next Twelve Months sales multiple has been increased to 10x from 9x, based on a rule-of-40 regression analysis. This comprehensive approach underpins Bernstein’s continued Outperform rating for Confluent stock. InvestingPro analysis indicates that while the stock trades at a high revenue multiple, it shows strong financial health metrics and has several additional bullish indicators available to subscribers.
In other recent news, Confluent Inc. has been the subject of multiple price target adjustments by several financial firms. Stifel analysts have raised their price target to $40, maintaining a Buy rating, citing positive indicators such as a subscription revenue guide for 2025 that slightly exceeds market expectations. Guggenheim Securities followed suit, increasing their price target to $38, while noting Confluent’s cloud revenue growth of 38% year-over-year.
Scotiabank (TSX:BNS) analyst Nick Altmann also adjusted his price target on Confluent to $35.00, due to the company’s fiscal year 2025 subscription revenue growth guidance, which aligns closely with consensus estimates. Additionally, Mizuho (NYSE:MFG) Securities showed confidence in Confluent by raising its price target to $38, following the company’s strong fourth-quarter earnings and the announcement of an expanded partnership with Databricks.
Lastly, Canaccord Genuity increased its price target on Confluent’s shares to $38.00, citing the company’s strong position in the data-in-motion market and the successful development of its cloud platform. These recent developments reflect a broad consensus among analysts that Confluent Inc. is well-positioned for continued growth in the data streaming market.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.