US mulls equity stakes in chipmakers receiving CHIPS Act Funds - Reuters
On Wednesday, DA Davidson analysts increased their price target on Confluent Inc (NASDAQ:CFLT) shares to $42.00, up from the previous $42.00, while maintaining a Buy rating on the stock. The company, currently trading at $36.34 with a market capitalization of $12 billion, has shown remarkable momentum with a 49% surge over the past six months according to InvestingPro data. The revision follows Confluent’s reported fourth-quarter results, which showcased a robust performance, particularly in Cloud Revenue, which hit $137.9 million. This figure represents 55% of the company’s Subscription Revenue and marks a 38% year-over-year increase, surpassing consensus estimates.
Confluent’s Cloud Revenue growth has been attributed to stable consumption growth and the continued expansion of use cases. The company’s initial guidance for Subscription Revenue growth in the calendar year 2025 indicates an increase of 21-22% year-over-year, which, despite being slightly below consensus at the midpoint, aligns closely with expectations and is considered better than anticipated by many, including DA Davidson. While currently unprofitable, InvestingPro analysis reveals a robust gross profit margin of 73.16% and analysts expect profitability this year. Get access to 7 more key ProTips and comprehensive analysis with an InvestingPro subscription.
The analysts are optimistic about Confluent’s market opportunities and its leading competitive position. They expect the company’s cloud growth to remain above 30% throughout the calendar year 2025. This growth is anticipated to be supported by an increasing mix of Dedicated Streaming Platform (DSP) usage, which is predicted to contribute to revenue stabilization.
DA Davidson’s stance on Confluent remains bullish due to the company’s long-term growth outlook. With the raised price target from $34 to $42, the firm reaffirms its confidence in Confluent’s ongoing performance and potential in the market. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, though the company maintains strong revenue growth of 25% year-over-year.
In other recent news, Confluent Inc. has been the recipient of several positive adjustments from major analyst firms following its robust performance in the fourth quarter of 2024. Bernstein analysts have raised their price target for Confluent to $35, highlighting the company’s strong subscription revenue performance and significant cloud revenue growth. Similarly, Stifel has increased its price target to $40, citing a subscription revenue guide for 2025 that exceeds market expectations.
Guggenheim Securities also raised their price target to $38, focusing on Confluent’s cloud revenue growth of 38% year-over-year. They noted that this growth aligns with management’s description of a stable consumption environment and sets a solid foundation for the company’s fiscal year 2025 subscription revenue guidance. Scotiabank (TSX:BNS) also increased its price target to $35, following Confluent’s fiscal year 2025 subscription revenue growth guidance, which aligns closely with consensus estimates.
Lastly, Mizuho (NYSE:MFG) Securities exhibited confidence in Confluent by increasing its price target on the company’s shares to $38. The adjustment comes after Confluent’s fourth-quarter earnings surpassed expectations, with a significant contribution from Confluent Cloud. These recent developments underline the strong performance and potential of Confluent 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.