Clearwater Analytics Holdings (CWAN – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Michael Infante from Morgan Stanley maintained a Buy rating on the stock and has a $36.00 price target.
Michael Infante has given his Buy rating due to a combination of factors that highlight Clearwater Analytics Holdings as a strong investment opportunity. The company is seen as a preferred choice for defensive exposure in the small to mid-cap fintech sector. Despite some investor skepticism regarding the recent acquisition of Enfusion, Infante believes the potential for revenue growth dilution is overstated, while the opportunity for cross-selling is significantly underestimated. Additionally, Clearwater’s ability to maintain over 20% growth is supported by cross-selling and pricing strategies, which are expected to contribute meaningfully to revenue.
Clearwater’s long-term financial targets remain unchanged, even after the Enfusion acquisition, with expectations of 20% revenue growth, 80% gross margins, and 40% adjusted EBITDA margins. The company has demonstrated the potential to exceed these targets due to improvements driven by artificial intelligence and efficiency gains, such as reduced onboarding times. These factors, along with the possibility of rate cuts benefiting the financial model, contribute to Infante’s confidence in Clearwater’s ability to outperform and justify the Buy rating.
According to TipRanks, Infante is a 3-star analyst with an average return of 18.7% and a 100.00% success rate. Infante covers the Technology sector, focusing on stocks such as Clearwater Analytics Holdings, Q2 Holdings, and nCino.
In another report released on February 20, Piper Sandler also upgraded the stock to a Buy with a $36.00 price target.