Confluent stock price target raised to $30 from $22 by Wolfe Research

Investing.com - Wolfe Research raised its price target on Confluent Inc (NASDAQ:CFLT) to $30.00 from $22.00 on Wednesday, maintaining an Outperform rating following reports the company is exploring a sale. According to InvestingPro data, analysts’ targets for the stock range from $20 to $36, with the current price near $23 suggesting potential upside based on the consensus view.

The firm noted it was "not surprised by the news given the recent up-tick in consolidation in the broader data management sector." Wolfe Research views Confluent as a strategic asset in the data streaming market. The company’s strong balance sheet, with more cash than debt and a healthy current ratio of 3.98, makes it an attractive acquisition target.

Wolfe Research suggested several potential acquirers that would make strategic sense, including IBM, data platforms like Snowflake, or ServiceNow, as Confluent’s data streaming capabilities would enable real-time analytics across their customer bases.

The firm highlighted that Confluent’s technology is "increasingly critical as AI applications demand low-latency data processing," underscoring its strategic value in the current market.

Wolfe Research estimates a potential takeout price of $30, implying approximately 8x EV/CY26 Revenue, representing a roughly 30% premium to Middleweight Growth peers and in line with IBM’s acquisition of HCP in April 2024.

In other recent news, Confluent announced its second-quarter results, which slightly exceeded expectations and led to an upward revision of its calendar year 2025 subscription revenue guidance. Despite this positive performance, DA Davidson and Needham both lowered their price targets for Confluent to $24, citing concerns about cloud growth and pressures from large customer optimizations. Meanwhile, Wells Fargo initiated coverage of Confluent with an Overweight rating, expressing optimism about the company’s potential as an AI beneficiary. Additionally, Confluent appointed Stephen Deasy as its new Chief Technology Officer, who will focus on enhancing the company’s AI capabilities and real-time intelligence. In a strategic move, Confluent also announced a multi-year partnership with the Visa Cash App Racing Bulls Formula 1 team, with its logo set to appear on the team’s car. These developments reflect a mix of strategic partnerships and leadership changes aimed at bolstering Confluent’s market position.

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