Confluent’s Strong Performance and Growth Potential Justifies Buy Rating Despite Adjusted Guidance

Confluent (CFLT – Research Report), the Technology sector company, was revisited by a Wall Street analyst today. Analyst Derrick Wood from TD Cowen reiterated a Buy rating on the stock and has a $32.00 price target.

Derrick Wood has given his Buy rating due to a combination of factors that highlight Confluent’s strong performance and potential for growth. The company reported a solid fourth quarter with subscription revenue growth surpassing expectations, and key performance indicators such as net new additions and net revenue retention were notably strong. Despite a slight reduction in the fiscal year 2025 subscription revenue growth guidance, this adjustment is seen as a precaution against potential macroeconomic pressures, and the guidance is considered adequately de-risked.
Moreover, Confluent’s platform demonstrated strength, with platform revenues exceeding expectations and international demand showing positive trends. The company also experienced significant growth in cloud revenues and billings. Management has identified several growth drivers, including open-source software conversion, cross-selling of new data streaming solutions, and increased demand for generative AI applications, which are expected to contribute to future growth. These factors, combined with the current valuation, present a buying opportunity, leading to the reiteration of the Buy rating, albeit with a slightly reduced price target.

In another report released today, Barclays also maintained a Buy rating on the stock with a $27.00 price target.

Based on the recent corporate insider activity of 96 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.