Stephens analyst Brett Huff downgraded the rating on Confluent to a Hold today, setting a price target of $31.00.
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Brett Huff has given his Hold rating due to a combination of factors surrounding Confluent’s recent developments. The announcement that IBM plans to acquire Confluent for approximately $11 billion, at a price of $31 per share, represents a significant premium over its recent trading levels. This acquisition price, which is 8.2 times the expected future revenue, aligns with Confluent’s historical valuation averages, especially considering the increasing importance of real-time data streaming for AI and database migrations.
Brett Huff believes that this acquisition not only confirms the value of Confluent’s business model, which monetizes enterprise-grade versions of open-source products, but also suggests a potential trend of consolidation in the data technology sector. While the stock is trading slightly below the deal price, the anticipated completion of the acquisition by mid-2026 presents a potential short-term trading opportunity. As a result, Huff has adjusted his rating from Outperform to Equal Weight, reflecting the current market dynamics and the acquisition’s implications.
In another report released today, Piper Sandler also downgraded the stock to a Hold with a $31.00 price target.
Based on the recent corporate insider activity of 82 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CFLT in relation to earlier this year.