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Confluent (CFLT)
NASDAQ:CFLT

Confluent (CFLT) AI Stock Analysis

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Confluent

(NASDAQ:CFLT)

Rating:64Neutral
Price Target:
$26.00
▲(1.56%Upside)
Confluent's overall stock score is driven by strong growth in revenue and customer base, alongside positive technical indicators. However, the company's lack of profitability and negative valuation metrics weigh heavily on the score. The positive sentiment from the recent earnings call, despite some caution, supports confidence in future growth, albeit with a conservative outlook.
Positive Factors
Financial Performance
Confluent reported a strong Q1 with a meaningful beat on top-line and some of the best customer metrics seen in over a year.
Market Leadership
Confluent is the leader in an attractive data-in-motion market, uniquely positioned at the intersection of open-source Kafka, platform expansion, and AI infrastructure modernization.
Product Adoption
Encouraging signals around new product adoption, including Flink, TableFlow, and Warpstream, highlight Confluent's growth potential.
Negative Factors
Cloud Performance
Weaker consumption trends and macro volatility weigh on cloud performance, impacting the full-year outlook.
Customer Consumption Trends
Larger customers have slowed the pace of new use case additions, focusing on cost optimization with no expected near-term rebound in consumption.
Guidance Revisions
A slight guidance cut pressures the stock, overshadowing an otherwise stellar Q1 performance.

Confluent (CFLT) vs. SPDR S&P 500 ETF (SPY)

Confluent Business Overview & Revenue Model

Company DescriptionConfluent, Inc. is a technology company specializing in data streaming services. It operates primarily in the information technology and software sectors, providing a cloud-based platform that enables organizations to harness the power of real-time data streams. Confluent's core products include Confluent Platform and Confluent Cloud, which are built on Apache Kafka, an open-source stream processing software. These solutions allow companies to connect, process, and react to data in real-time, facilitating enhanced decision-making and operational efficiency.
How the Company Makes MoneyConfluent 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 Key Performance Indicators (KPIs)

Any
Any
Cloud Revenue
Cloud Revenue
Indicates the income generated from cloud services, highlighting the company's success in attracting and retaining customers in the cloud market, and its ability to scale and innovate in a competitive landscape.
Chart InsightsConfluent's cloud revenue has shown consistent growth, reaching $143 million in Q1 2025, a 34% increase. Despite this strong performance, the company anticipates a slowdown in growth due to reduced cloud consumption by larger customers and macroeconomic uncertainties. Management remains optimistic, driven by strategic partnerships, product diversification, and a robust data streaming platform. However, they have adopted a conservative outlook for future cloud revenue growth, highlighting the need for cautious optimism amid potential headwinds.
Data provided by:Main Street Data

Confluent Earnings Call Summary

Earnings Call Date:Apr 30, 2025
(Q1-2025)
|
% Change Since: 7.52%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call reflected strong financial performance with significant growth in subscription and cloud revenues, improved operating margins, and record customer additions. However, caution was expressed due to a slowdown in cloud consumption by larger customers and uncertainties in the macro environment, leading to a conservative outlook for future growth.
Q1-2025 Updates
Positive Updates
Strong Growth in Subscription Revenue
Q1 subscription revenue grew 26% to $261 million, demonstrating strong demand for Confluent's offerings.
Confluent Cloud Revenue Surge
Confluent Cloud revenue increased by 34% to $143 million, indicating robust growth in cloud services.
Improvement in Operating Margin
Non-GAAP operating margin improved by six percentage points to 4%, reflecting better operational efficiency.
Record Customer Additions
Added 340 new customers in Q1, the highest net addition in three years, indicating strong market demand and product adoption.
Expansion of Million-Dollar ARR Customers
Added 16 new customers to the cohort of $1 million-plus ARR customers, the highest addition to that cohort ever.
Strong Performance of Confluent Platform
Confluent Platform revenue grew 18% year-over-year, marking its strongest Q1 growth in three years.
Strategic Partnerships and Recognitions
Named a Google Partner of the Year for the sixth time, highlighting strong strategic partnerships with leading CSPs.
Growth in Data Streaming Platform Components
Significant growth in DSP components, which outgrew the core cloud business, indicating strong product diversification.
Negative Updates
Slowdown in Cloud Consumption by Large Customers
Observed lower consumption in larger customers due to cost optimization and slower addition of new use cases.
Uncertain Macro Environment Impact
Guidance reflects a modest decline in growth rates from Q2 through Q4 due to uncertainties in the current macro environment.
Conservative Outlook for Cloud Revenue Growth
Guidance assumes no near-term rebound in cloud consumption, contrasting with previous cycles of expansion after optimization.
Company Guidance
During the Confluent Q1 2025 earnings call, the company provided financial guidance for the fiscal second quarter and the full fiscal year 2025. For Q2, they expect subscription revenue to be between $267 million and $268 million, representing about 19% growth, with a non-GAAP operating margin of approximately 5% and non-GAAP net income per diluted share in the range of $0.08 to $0.09. For the fiscal year 2025, Confluent projects subscription revenue of $1.1 billion to $1.11 billion, marking growth of 19% to 20%. They anticipate a non-GAAP operating margin of around 6% and non-GAAP net income per diluted share of approximately $0.36. Despite an uncertain macro environment, Confluent remains confident in its growth trajectory, driven by its mission-critical data streaming platform and diversified growth strategies, including its streaming conversion opportunity, DSP upsell potential, AI strategic role, and expanding partner ecosystem.

Confluent Financial Statement Overview

Summary
Confluent is experiencing strong revenue growth and maintains a solid gross profit margin. However, ongoing profitability challenges are highlighted by negative net and operational margins. The balance sheet reflects a stable equity base and manageable debt levels, though high liabilities pose potential risks. Improvements in cash flow are promising, but further efforts are needed to sustain and stabilize growth.
Income Statement
65
Positive
Confluent has shown robust revenue growth, increasing from $236.6 million in 2020 to $1.02 billion in TTM 2025. The company demonstrates a strong gross profit margin, which stands at 73.9% for TTM 2025. However, the net profit margin remains negative, indicating ongoing challenges in achieving profitability, with a net income loss of $319.7 million in TTM 2025. EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. Overall, the company is growing its top line but needs to manage costs better to achieve profitability.
Balance Sheet
70
Positive
Confluent maintains a solid equity base, with stockholders' equity increasing to $1.03 billion in TTM 2025. The debt-to-equity ratio is relatively moderate at 1.08, suggesting a balanced approach to leveraging debt for growth. The equity ratio improved to 38.0%, indicating a stable financial position with a strong asset base. While the company has increased its cash reserves, the overall liabilities remain high, which could pose risks if revenue growth slows.
Cash Flow
58
Neutral
The company managed to turn its free cash flow positive in TTM 2025 with $12.9 million, a significant improvement from negative values in previous years. The operating cash flow to net income ratio remains low, indicating that cash generation from operations is still a challenge. Free cash flow growth is positive, but the company needs to focus on sustaining this trend to support its growth initiatives without relying heavily on external financing.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.02B963.64M776.95M585.94M387.86M236.58M
Gross Profit752.20M706.17M547.28M383.53M250.57M161.10M
EBITDA-387.39M-419.15M-430.01M-455.05M-335.99M-231.61M
Net Income-319.67M-345.06M-442.75M-452.55M-342.80M-229.83M
Balance Sheet
Total Assets2.70B2.69B2.46B2.34B2.34B526.12M
Cash, Cash Equivalents and Short-Term Investments1.92B1.91B1.90B1.93B2.02B288.55M
Total Debt1.11B1.11B1.11B1.12B1.12B50.93M
Total Liabilities1.67B1.73B1.65B1.58B1.49B832.37M
Stockholders Equity1.03B961.23M810.41M769.48M850.28M-306.25M
Cash Flow
Free Cash Flow12.98M9.49M-124.34M-171.79M-114.00M-86.71M
Operating Cash Flow32.66M33.46M-103.66M-157.33M-105.06M-82.06M
Investing Cash Flow-170.22M-74.98M-84.85M-865.80M-400.58M-176.86M
Financing Cash Flow80.60M79.81M102.37M82.24M1.84B276.76M

Confluent Technical Analysis

Technical Analysis Sentiment
Positive
Last Price25.60
Price Trends
50DMA
23.05
Positive
100DMA
24.95
Positive
200DMA
25.75
Positive
Market Momentum
MACD
0.65
Negative
RSI
70.17
Negative
STOCH
92.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CFLT, the sentiment is Positive. The current price of 25.6 is above the 20-day moving average (MA) of 24.32, above the 50-day MA of 23.05, and below the 200-day MA of 25.75, indicating a bullish trend. The MACD of 0.65 indicates Negative momentum. The RSI at 70.17 is Negative, neither overbought nor oversold. The STOCH value of 92.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CFLT.

Confluent Risk Analysis

Confluent disclosed 74 risk factors in its most recent earnings report. Confluent reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Confluent Peers Comparison

Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$8.48B5,193.620.09%2.28%
MDMDB
77
Outperform
$16.70B-4.00%19.24%59.66%
68
Neutral
$6.88B-3.62%7.21%23.13%
64
Neutral
$8.71B-34.18%24.11%21.87%
DBDBX
64
Neutral
$7.76B18.10-60.11%0.79%0.59%
SS
64
Neutral
$6.03B-26.98%32.25%20.56%
59
Neutral
€3.24B12.45-9.91%2.76%2.38%-49.53%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CFLT
Confluent
26.30
-3.01
-10.27%
MDB
MongoDB
211.34
-55.40
-20.77%
DBX
Dropbox
28.00
5.67
25.39%
PATH
UiPath
13.29
0.05
0.38%
S
SentinelOne
18.45
-1.90
-9.34%
INFA
Informatica
24.41
-6.79
-21.76%

Confluent Corporate Events

Executive/Board ChangesShareholder Meetings
Confluent Holds 2025 Annual Stockholders Meeting
Neutral
Jun 13, 2025

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 25, 2025