UBS raises Confluent stock price target to $32 on growth potential

Investing.com - UBS raised its price target on Confluent Inc (NASDAQ:CFLT) to $32.00 from $30.00 on Friday, while maintaining a Buy rating on the data streaming platform company. The new target sits within the current analyst range of $22-$36, with InvestingPro data showing 17 analysts recently revising their earnings estimates upward for the upcoming period.

The price target adjustment follows UBS analyst discussions with over 10 industry sources ahead of Confluent’s second-quarter 2025 earnings report scheduled for July 30.

UBS noted that core streaming demand appears stable, though artificial intelligence integration has shown only modest contribution to growth thus far.

The firm highlighted medium-term growth potential from Confluent’s Flink, Tableflow, and WarpStream offerings, which UBS estimates could add more than 5 percentage points of growth once fully implemented, likely in 2027 and beyond.

UBS views Confluent’s current valuation as reasonable at approximately 6 times estimated 2026 revenue, with potential for mid-teens free cash flow margins by 2027.

In other recent news, Confluent Inc. has faced a series of revisions in analyst price targets following its first-quarter 2025 earnings report. Citi analyst Tyler Radke lowered Confluent’s price target to $25, citing a disappointing cloud revenue performance and a reduction in full-year guidance. Similarly, Needham adjusted its target to $26, maintaining a Buy rating despite noting customer optimization trends that could slow recovery. Canaccord Genuity also reduced its target to $32 while expressing optimism about Confluent’s position in the data streaming sector and reaffirming a Buy rating. Bernstein cut its price target to $32, maintaining an Outperform rating, after Confluent’s subscription revenue exceeded expectations, though cloud performance met only consensus expectations. During Confluent’s annual meeting, shareholders elected directors and ratified PricewaterhouseCoopers LLP as the accounting firm for 2025. Additionally, the compensation for Confluent’s executive officers was approved on a non-binding advisory basis. These developments reflect a cautious outlook from analysts and management regarding Confluent’s near-term growth prospects.

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