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Investing.com - RBC Capital has reiterated an Outperform rating on Clearwater Analytics Holdings (NYSE:CWAN) with a price target of $36.00. The company, which maintains a "GOOD" overall financial health score according to InvestingPro, has demonstrated impressive revenue growth of nearly 37% in the last twelve months.
The reaffirmation follows RBC Capital’s attendance at Clearwater’s annual user conference in Boise, where the firm’s analysts gained insights that reinforced their positive outlook on the company.
RBC Capital noted that its experience at the conference left them "incrementally positive" about Clearwater Analytics, strengthening their view that the current share price represents a dislocation from the company’s value.
The firm pointed out that at approximately $19 per share, Clearwater Analytics trades at roughly 19 times the enterprise value to estimated 2026 EBITDA ratio.
RBC Capital’s maintained price target of $36 implies a multiple of approximately 34 times enterprise value to estimated 2026 EBITDA, suggesting significant potential upside from current trading levels.
In other recent news, Clearwater Analytics reported significant financial results for the second quarter, showcasing a 70% year-over-year growth in total revenue and a 74% increase in adjusted EBITDA. These figures exceeded DA Davidson’s forecasts by 5% and 10%, respectively, leading the firm to maintain a Buy rating on the stock, although they lowered the price target to $34. Additionally, Clearwater Analytics has announced a $100 million share repurchase program, which aims to offset the dilutive impact of recent share issuances. This move is expected to reduce the company’s public float by enabling the buyback of approximately 5 million shares.
Goldman Sachs has upgraded Clearwater Analytics to a Buy rating from Neutral, maintaining a $27 price target, citing a structured plan to drive growth. Morgan Stanley also adjusted its price target for the company to $27, noting a less explosive quarterly performance than anticipated in net new annual recurring revenue. Despite these adjustments, Morgan Stanley maintains an Overweight rating on the stock. These developments reflect a mix of optimism and caution among analysts regarding Clearwater Analytics’ future performance.
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