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Investing.com - Goldman Sachs upgraded Clearwater Analytics Holdings (NYSE:CWAN) to Buy from Neutral while maintaining its $27 price target, representing 37% upside potential. According to InvestingPro data, analyst targets range from $23 to $36, with the stock currently trading at $18.45.
The upgrade comes as Clearwater’s stock has declined 33.37% over the past six months, significantly underperforming compared to the Nasdaq’s 9% gain during the same period. InvestingPro analysis shows the stock trading near its 52-week low of $17.98, while maintaining strong fundamentals with a current ratio of 2.02.
Goldman Sachs attributes the stock’s weakness primarily to investor concerns about the quality of acquired assets and Clearwater’s progress integrating multiple businesses simultaneously.
Despite these concerns, Goldman Sachs estimates that after subtracting Enfusion from Clearwater’s enterprise value, the core business trades at approximately 31 times free cash flow while consistently growing over 20% with a multi-year runway for market share gains.
The firm believes execution risks related to acquisitions are now adequately priced into the stock and sees a positive catalyst path ahead, including Clearwater’s upcoming Analyst Day scheduled for September 3.
In other recent news, Clearwater Analytics Holdings reported its second-quarter earnings for 2025, surpassing market expectations. The company achieved an earnings per share (EPS) of $0.12, exceeding the forecast of $0.11, and generated revenue of $181.9 million, outperforming the expected $174.1 million. In addition to its financial results, Clearwater has completed its acquisitions of Enfusion and Beacon, achieving $20 million in synergies a full year ahead of schedule. The Enfusion business also reported record-breaking bookings for the quarter.
Analyst firms have adjusted their price targets for Clearwater Analytics following these developments. Morgan Stanley (NYSE:MS) lowered its price target to $27, citing a less explosive performance in net new annual recurring revenue, while maintaining an Overweight rating. Loop Capital also reduced its price target to $31 but maintained a Buy rating, noting the successful integration of recent acquisitions. These updates provide investors with a clearer picture of Clearwater’s current position and future potential.
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