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Investing.com - Goldman Sachs has reiterated a Buy rating and $27.00 price target on Clearwater Analytics Holdings (NYSE:CWAN) following the company’s second Investor Day held on September 3. According to InvestingPro data, analyst targets range from $23 to $36, with the stock currently trading at $20.20.
The investment bank highlighted improved confidence in continued 20% growth in Clearwater’s core business while also driving re-acceleration in Enfusion’s growth through a structured five-point plan. The company has demonstrated strong momentum with a 37% revenue growth in the last twelve months and maintains a healthy 71% gross profit margin.
Goldman Sachs noted that Clearwater’s long-term goal of creating a unified platform for seamless front-to-back workflows across the investment management lifecycle presents an ambitious opportunity, though this process remains in very early stages.
The firm maintained its 12-month price target of $27, based on 35x EV/FCF on its Q5-Q8 free cash flow estimates.
According to Goldman Sachs, the main driver of Clearwater’s stock over the next 12 months will be the company’s ability to drive continued market share gains in its core business while also re-accelerating growth at Enfusion.
In other recent news, Clearwater Analytics reported a 70% year-over-year increase in total revenue and a 74% rise in adjusted EBITDA for the second quarter, surpassing DA Davidson’s expectations by 5% and 10%, respectively. The company also announced a $100 million share repurchase program aimed at mitigating the impact of recent share issuances and reducing its public float. In terms of analyst activity, Goldman Sachs upgraded Clearwater Analytics to a Buy rating, maintaining a $27 price target. Meanwhile, Morgan Stanley and Loop Capital both lowered their price targets to $27 and $31, respectively, while keeping favorable ratings. Morgan Stanley cited a less robust quarterly performance in net new annual recurring revenue as the reason for their adjustment. Loop Capital noted Clearwater’s successful integration of its Enfusion and Beacon acquisitions, achieving $20 million in synergies a year ahead of schedule. Despite these mixed analyst views, Clearwater’s recent strategic moves and financial results remain a focal point for investors.
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