Confluent (CFLT) AI Stock Analysis

• Market Cap: $5.71B
• Dividend Yield: N/A
• Average Volume (3M): 8.76M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.52
• Revenue Growth: 23.02%
• EPS Growth: 21.01%
• Country: US
• Employees: 3,060
• Sector: Technology
• Sector Strength: 94
• Industry: Software - Infrastructure
• EPS (TTM): 0.09
• Shares Outstanding: 291,931,180
• 10 Day Avg. Volume: 16,017,815
• 30 Day Avg. Volume: 8,759,929
• PEG Ratio: 0.96
• Price to Book (P/B): 9.36
• Price to Sales (P/S): 9.34
• P/FCF Ratio: 948.39
• Enterprise Value/Market Cap: 1.34
• Enterprise Value/Revenue: 7.21
• Enterprise Value/Gross Profit: 9.71
• Enterprise Value/Ebitda: -20.52
• 1Y Price Target: $24.31
• Price Target Upside: 36.19% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25

• Rating: 57 Neutral
• Price Target: $18.50 ▲(3.64% Upside)

Confluent's stock score reflects strong revenue growth and strategic partnerships, which are offset by negative profitability margins and potential revenue headwinds from customer shifts. The technical indicators suggest a bearish trend, although the oversold RSI could signal a potential rebound. The valuation is challenging due to lack of profitability and dividends, making it less attractive to value investors. Earnings call sentiment is cautiously optimistic but acknowledges significant challenges.

Positive Factors

Flink ARR Growth

Flink ARR grew approximately threefold over the past two quarters, reaching $10 million of ARR in Q2.

Strategic Investments

Confluent announced a $200 million investment to expand its global partner ecosystem in advance of greater AI development.

Negative Factors

Cloud Growth Pressure

Cloud growth is likely to be pressured as CFLT faces the large customer’s migration.

Customer Optimizations

Large AI-native customer has chosen to move toward self-management, reducing Confluent spend.

Revenue Retention Decline

Net Revenue Retention declined 300 basis points quarter-over-quarter to 114% and is likely to head lower in the coming periods.

Confluent Business Overview & Revenue Model

Company Description

Confluent, Inc. operates a data streaming platform in the United States and internationally. It offers Confluent Cloud, a managed cloud-native service for connecting and processing data; and Confluent Platform, an enterprise-grade self-managed software that connects and processes data in real-time with the foundational platform for data in motion. It also provides Kafka Connect that enables to build connectors to integrate Apache Kafka with other apps and data systems; ksqlDB, a database for stream processing applications; and stream governance, a solution that is designed for the intricacies of streaming data, which allows teams to expand usage of real-time data without bypassing requirements for risk management and regulatory compliance. In addition, it also offers training and professional services. The company was formerly known as Infinitem, Inc. and changed its name to Confluent, Inc. in September 2014. Confluent, Inc. was incorporated in 2014 and is headquartered in Mountain View, California.

How the Company Makes Money

Confluent generates revenue through a combination of subscription-based services and professional support offerings. The primary revenue stream comes from its Confluent Cloud, a managed service that charges customers based on their usage of data streaming capabilities. This includes fees for data storage, processing, and transfer. Additionally, Confluent Platform, a self-managed software offering, provides another revenue stream through licensing fees. The company also offers training, consulting, and support services, which contribute to its earnings. Key partnerships with cloud providers and enterprise clients further bolster Confluent's revenue, enabling it to tap into a broad customer base seeking robust data streaming solutions.

Confluent Financial Statement Overview

Summary

Confluent demonstrates strong revenue growth and a solid gross margin, indicating a healthy market demand and efficient cost of goods sold management. However, negative profitability margins and continued net losses highlight a need for operational efficiency improvements. The balance sheet is sound, with controlled leverage and a strong asset base. Cash flow improvements are notable, although full profitability remains a challenge.

Income Statement

Confluent shows a robust revenue growth trajectory, with TTM revenue increasing by approximately 10.5% compared to the previous year. Gross profit margin remains solid at around 74.2%. However, the net profit margin is negative due to substantial net losses, indicating ongoing challenges in achieving profitability. EBIT and EBITDA margins are also negative, reflecting high operational costs.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of approximately 1.04, indicating moderate leverage. The equity ratio is around 37.8%, pointing to a stable financial structure. Return on equity remains negative due to net losses, but overall, the financial position is stable with ample assets to cover liabilities.

Cash Flow

Operating cash flow has turned positive in the TTM period, reflecting improvements in cash generation. Free cash flow has also improved significantly, growing from the previous period. However, the free cash flow to net income ratio is low due to continued net losses, suggesting that profitability is still a concern despite cash flow improvements.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.06B	963.64M	776.95M	585.94M	387.86M	236.58M
Gross Profit	790.27M	706.17M	547.28M	383.53M	250.57M	161.10M
EBITDA	-373.98M	-419.15M	-430.01M	-455.05M	-335.99M	-231.61M
Net Income	-311.72M	-345.06M	-442.75M	-452.55M	-342.80M	-229.83M
Balance Sheet
Total Assets	2.82B	2.69B	2.46B	2.34B	2.34B	526.12M
Cash, Cash Equivalents and Short-Term Investments	1.94B	1.91B	1.90B	1.93B	2.02B	288.55M
Total Debt	1.11B	1.11B	1.11B	1.12B	1.12B	50.93M
Total Liabilities	1.75B	1.73B	1.65B	1.58B	1.49B	832.37M
Stockholders Equity	1.06B	961.23M	810.41M	769.48M	850.28M	-306.25M
Cash Flow
Free Cash Flow	27.47M	9.49M	-124.34M	-171.79M	-114.00M	-86.71M
Operating Cash Flow	42.19M	33.46M	-103.66M	-157.33M	-105.06M	-82.06M
Investing Cash Flow	-132.17M	-74.98M	-84.85M	-865.80M	-400.58M	-176.86M
Financing Cash Flow	73.57M	79.81M	102.37M	82.24M	1.84B	276.76M

Confluent Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.85
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFLT, the sentiment is Negative. The current price of 17.85 is below the 20-day moving average (MA) of 21.24, below the 50-day MA of 23.18, and below the 200-day MA of 25.97, indicating a bearish trend. The MACD of -2.17 indicates Positive momentum. The RSI at 34.01 is Neutral, neither overbought nor oversold. The STOCH value of 67.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CFLT.

Confluent Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
INFA	72 Outperform	$8.63B	5,259.57	-0.32%	―	1.16%	-104.62%
MDB	71 Outperform	$16.98B	―	-4.00%	―	19.24%	59.66%
PATH	69 Neutral	$5.62B	―	-3.62%	―	7.21%	23.13%
S	64 Neutral	$5.42B	―	-26.98%	―	28.19%	-31.34%
DBX	62 Neutral	$7.68B	17.21	-60.11%	―	-0.04%	-5.07%
CFLT	57 Neutral	$5.71B	―	-32.18%	―	23.02%	21.01%
Sector *	50 Neutral	C$3.52B	0.35	-5.03%	7.64%	17.01%	-2.22%

Confluent Corporate Events

Confluent Holds 2025 Annual Stockholders Meeting

On June 11, 2025, Confluent, Inc. conducted its 2025 Annual Meeting of Stockholders, where holders of Class A and Class B common stock participated in voting on three proposals. The stockholders elected Class I directors to serve until 2028, ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025, and approved the compensation of named executive officers on a non-binding advisory basis.

The most recent analyst rating on (CFLT) stock is a Hold with a $28.00 price target. To see the full list of analyst forecasts on Confluent stock, see the CFLT Stock Forecast page.