Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $6.87B
• Dividend Yield: N/A
• Average Volume (3M): 13.55M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.79
• Revenue Growth: 50.91%
• EPS Growth: 54812.50%
• Country: US
• Employees: 1,915
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.15
• Shares Outstanding: 294,353,100
• 10 Day Avg. Volume: 9,357,541
• 30 Day Avg. Volume: 13,546,530
• PEG Ratio: 1.57
• Price to Book (P/B): 3.24
• Price to Sales (P/S): 8.95
• P/FCF Ratio: 39.82
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 10.41
• Enterprise Value/Gross Profit: 15.47
• Enterprise Value/Ebitda: 78.93
• 1Y Price Target: $26.46
• Price Target Upside: 14.35% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 68 Neutral
• Price Target: $25.00 ▲(8.04% Upside)
• Action: Downgraded Date: 02/19/26
• Date: Action: Downgraded 02/19/26

The score is driven primarily by strong cash generation and scaled, high-margin revenue growth, supported by positive earnings-call execution metrics and the announced take-private deal. These positives are tempered by volatile GAAP profitability and higher 2025 leverage, while technical indicators show weak near-term momentum despite oversold readings.

Positive Factors

Cash generation

Clearwater's sizable free cash flow (~$164M in 2025) and materially higher operating cash flow show durable cash conversion for a SaaS model. That cash funds product development, integration of acquisitions, and debt servicing while preserving strategic optionality over the medium term.

Scaled, high‑margin revenue

Multi-year revenue scaling and consistently high gross margins indicate a scalable, recurring-revenue SaaS franchise. This structural revenue base supports operating leverage as fixed costs are absorbed, enabling sustainable margin improvement and predictable recurring cash flows over the next several quarters.

Large client wins & retention

A multi-year EUR40B engagement plus near‑perfect gross retention (98%) validate the platform's competitiveness and stickiness. Large institutional contracts and strong retention secure recurring revenue, increase cross-sell opportunity, and underpin lasting ARR growth and client lifetime value.

Negative Factors

Rising leverage

A sharp step-up in debt to ~$860M and higher debt-to-equity materially reduces financial flexibility. Elevated leverage raises refinancing and interest-rate exposure, limits capital allocation options, and increases vulnerability to revenue or margin shocks over the medium term.

Earnings volatility

Inconsistent GAAP results — an exceptional 2024 profit followed by a 2025 net loss — signal earnings-quality risk. This volatility complicates forecasting, may constrain long-term investment prioritization, and can elevate the cost of capital until profitability stabilizes.

Execution and ARR lumpiness

Execution risk from integrating acquisitions (e.g., Enfusion) and lumpiness in large deals creates uneven ARR delivery. Commercial changes to acquired businesses add uncertainty to future revenue cadence and upsell dynamics, pressuring predictable ARR expansion in the medium term.

Clearwater Analytics Holdings Business Overview & Revenue Model

Company Description

Clearwater Analytics Holdings, Inc. develops and provides a Software-as-a-Service solution for automated investment data aggregation, reconciliation, accounting, and reporting services to insurers, investment managers, corporations, institutional investors, and government entities. The company offers investment accounting and reporting, performance measurement, compliance monitoring, and risk analytics solutions. Its Clearwater Prism solution enables self-service access to data feeds from accounting, compliance, performance, and risk systems, including those offered by the company and other third-party software vendors, as well as provides flexible reporting to various users. The company was incorporated in 2021 and is headquartered in Boise, Idaho.

How the Company Makes Money

Clearwater Analytics generates revenue primarily through subscription fees for its software-as-a-service (SaaS) platform. Clients pay for access to the platform based on the volume of assets under management or the number of user licenses. Key revenue streams include recurring subscription revenue from existing clients and additional fees for value-added services such as consulting and custom reporting. The company has established significant partnerships with financial institutions and investment firms, enhancing its market reach and credibility, which contribute to customer acquisition and retention. Clearwater's scalable business model allows it to increase revenues as it adds new clients and expands its service offerings.

Clearwater Analytics Holdings Financial Statement Overview

Summary

Strong multi-year revenue scaling and high gross margins support the software model, and free cash flow is a standout strength (2025 FCF ~$164M). Offsetting this are volatile GAAP profitability (2025 net loss after an outsized 2024 profit) and a sharp increase in leverage in 2025 (debt to ~$860M), which reduces earnings-quality confidence and raises balance-sheet risk.

Income Statement

Revenue has scaled strongly over time (from $203M in 2020 to $731M in 2025), with solid recent growth in 2025 (+14.2%). Gross margins are consistently healthy (~67%–74%), supporting the software model. However, profitability is inconsistent: 2025 swung back to a net loss (about -5.3% margin) and slightly negative EBITDA margin, and prior years also show periodic losses. The unusually large 2024 net profit (94% margin) looks non-recurring versus the company’s broader earnings pattern, which reduces confidence in earnings quality and stability.

Balance Sheet

The balance sheet shows meaningful scale-up in assets and equity by 2025 (assets ~$3.0B, equity ~$2.0B), but leverage increased sharply: total debt rose to ~$860M in 2025 and debt-to-equity moved up to ~0.43 versus ~0.07 in 2024. Returns on equity are also currently negative in 2025, reflecting the net loss. While today’s equity base is positive and sizable, the step-up in debt and profitability volatility adds risk compared with a cleaner, consistently profitable balance sheet.

Cash Flow

Cash generation is a clear strength. Operating cash flow improved materially to ~$176M in 2025 and free cash flow reached ~$164M, with very strong free cash flow growth in 2025. Free cash flow remains positive and sizable despite earnings volatility, indicating good cash conversion. A watch item is that 2024 free cash flow declined modestly versus 2023, and earlier years (notably 2020–2021) showed weak/negative cash flow, but the more recent multi-year trend is meaningfully stronger.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	731.37M	451.80M	368.17M	303.43M	252.02M
Gross Profit	492.15M	328.82M	261.04M	215.64M	184.16M
EBITDA	113.63M	24.41M	-6.82M	10.26M	31.95M
Net Income	-38.81M	424.38M	-21.63M	-7.97M	-8.21M
Balance Sheet
Total Assets	3.03B	1.17B	558.74M	481.94M	344.36M
Cash, Cash Equivalents and Short-Term Investments	91.25M	255.49M	296.22M	255.61M	254.60M
Total Debt	882.89M	71.92M	72.08M	76.60M	53.91M
Total Liabilities	1.00B	139.34M	149.09M	143.56M	82.49M
Stockholders Equity	2.02B	1.01B	354.33M	269.52M	196.87M
Cash Flow
Free Cash Flow	164.34M	69.06M	78.98M	50.25M	-1.67M
Operating Cash Flow	175.90M	74.32M	84.60M	58.01M	3.36M
Investing Cash Flow	-988.13M	-55.65M	-95.06M	-76.55M	-5.03M
Financing Cash Flow	725.41M	-61.67M	-19.29M	16.23M	195.29M

Clearwater Analytics Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 23.14
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWAN, the sentiment is Neutral. The current price of 23.14 is below the 20-day moving average (MA) of 23.59, below the 50-day MA of 23.59, and above the 200-day MA of 21.31, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 41.25 is Neutral, neither overbought nor oversold. The STOCH value of 45.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CWAN.

Clearwater Analytics Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWAN	68 Neutral	$6.87B	-169.07	-2.58%	―	50.91%	54812.50%
QTWO	67 Neutral	$2.95B	60.58	8.82%	―	13.93%	―
GTM	66 Neutral	$1.83B	15.48	7.76%	―	1.47%	1077.70%
INTA	66 Neutral	$1.71B	-73.01	-5.41%	―	17.11%	-19.12%
FROG	63 Neutral	$4.45B	-60.04	-8.65%	―	22.69%	-32.47%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	61 Neutral	$400.85M	-8.37	-26.69%	―	13.09%	32.34%

Clearwater Analytics Holdings Corporate Events

Clearwater Analytics Ends Go-Shop, Confirms GT Silver Merger

On January 23, 2026, the go-shop period under Clearwater Analytics Holdings’ previously announced merger agreement with GT Silver BidCo, Inc. and its wholly owned merger subsidiary expired, following a market check run by the company’s board-appointed special committee and its financial advisors. During the go-shop window, Clearwater’s advisors contacted 44 potential bidders, including financial sponsors and strategic buyers, with six parties entering confidentiality agreements and accessing non-public information, but no alternative acquisition proposals emerged; as a result, Clearwater has now entered a customary no-shop phase that restricts it from soliciting rival bids, effectively reinforcing the original merger agreement and signaling limited competitive interest at this stage, a development that consolidates deal certainty for the buyer while narrowing strategic optionality for existing shareholders.

The most recent analyst rating on (CWAN) stock is a Hold with a $24.55 price target. To see the full list of analyst forecasts on Clearwater Analytics Holdings stock, see the CWAN Stock Forecast page.

Clearwater Analytics to Be Taken Private in Merger

On December 20, 2025, Clearwater Analytics Holdings entered into a definitive merger agreement under which GT Silver Merger Sub, an affiliate of a Permira and Warburg Pincus–led investor group with participation from Temasek and support from Francisco Partners, will merge with Clearwater, valuing the company at about $8.4 billion and taking it private. Under the agreed terms, Clearwater stockholders will receive $24.55 in cash per share—representing a roughly 47% premium to the company’s undisturbed share price on November 10, 2025—with existing equity awards largely cashed out on similar economics, and the company’s Class A common stock delisted from the NYSE upon closing, which is targeted for the first half of 2026 pending shareholder and regulatory approvals. The transaction, unanimously recommended by a special committee of independent directors and subsequently approved by the full board, includes a go-shop period through January 23, 2026 that allows Clearwater to solicit superior bids, as well as a detailed framework of termination and reverse-termination fees and fully committed equity and debt financing to support the cash consideration, underscoring a tightly structured, sponsor-backed buyout that will reposition Clearwater as a private fintech platform focused on accelerated product investment and integration of recently acquired capabilities.

The most recent analyst rating on (CWAN) stock is a Buy with a $36.00 price target. To see the full list of analyst forecasts on Clearwater Analytics Holdings stock, see the CWAN Stock Forecast page.