Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $5.54B
• Dividend Yield: N/A
• Average Volume (3M): 4.14M
• Price to Earnings (P/E): 12.0
• Beta (1Y): 0.82
• Revenue Growth: 36.68%
• EPS Growth: N/A
• Country: US
• Employees: 1,915
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.12
• Shares Outstanding: 287,938,750
• 10 Day Avg. Volume: 3,782,026
• 30 Day Avg. Volume: 4,138,147
• PEG Ratio: >-0.01
• Price to Book (P/B): 5.99
• Price to Sales (P/S): 13.36
• P/FCF Ratio: 87.39
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 12.35
• Enterprise Value/Gross Profit: 17.51
• Enterprise Value/Ebitda: 188.88
• 1Y Price Target: $30.57
• Price Target Upside: 60.56% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 74 Outperform
• Price Target: $22.50 ▲(18.17% Upside)

Clearwater Analytics Holdings shows strong financial performance and positive earnings call sentiment, supported by strategic corporate events like share buybacks and board expansion. However, technical indicators suggest caution with potential overbought conditions, and the lack of a dividend yield may deter income-focused investors. Overall, the stock presents a promising growth opportunity with some risks to consider.

Positive Factors

Revenue Growth

Clearwater's significant revenue growth indicates strong demand for its solutions, reinforcing its market position and supporting future expansion.

Strategic Partnerships

The partnership with Bloomberg enhances Clearwater's service offerings, potentially expanding its client base and strengthening its competitive edge.

Share Buyback Program

The share buyback program reflects confidence in the company's financial health and commitment to enhancing shareholder value, supporting long-term growth.

Negative Factors

GAAP Loss

The GAAP loss highlights potential challenges in managing acquisition costs, which could impact profitability if not addressed effectively.

Variable Net Revenue Retention

Variable retention rates for Enfusion suggest challenges in client retention, which could affect revenue stability if not improved.

Operational Efficiency

Low EBIT and EBITDA margins indicate room for operational efficiency improvements, essential for sustaining long-term profitability.

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 a subscription-based model, where clients pay for access to its software and services. The company offers tiered pricing based on the size of the client's assets under management (AUM) and the specific features they utilize. Key revenue streams include fees from software subscriptions, professional services for implementation and training, and ongoing support and maintenance. Additionally, Clearwater has formed strategic partnerships with financial institutions and technology providers, enhancing its service offerings and expanding its market reach, which contributes significantly to its earnings.

Clearwater Analytics Holdings Financial Statement Overview

Summary

Clearwater Analytics Holdings demonstrates strong financial performance with impressive revenue growth and profitability metrics. The balance sheet is solid with manageable leverage, and cash flows are improving, supporting the company's growth trajectory. However, attention should be given to operational efficiency and maintaining sustainable profit margins to ensure long-term success.

Income Statement

Clearwater Analytics Holdings shows strong revenue growth with a 15.79% increase in TTM, indicating robust demand for its software solutions. The gross profit margin remains healthy at 70.56%, reflecting efficient cost management. However, the net profit margin is exceptionally high at 73.71%, likely due to one-time gains or accounting adjustments, which may not be sustainable. EBIT and EBITDA margins are relatively low, suggesting room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.47, indicating prudent leverage. The return on equity is strong at 36.15%, showcasing effective use of shareholder funds. However, the equity ratio is moderate, suggesting a balanced approach to financing with both debt and equity. The company should continue to monitor its debt levels to maintain financial flexibility.

Cash Flow

Cash flow analysis reveals a positive trajectory with a 2.01% growth in free cash flow, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.72, suggesting that a significant portion of net income is backed by cash flow. The free cash flow to net income ratio is high at 0.93, reflecting strong cash conversion. Continued focus on cash flow management will be crucial for sustaining growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	551.09M	451.80M	368.17M	303.43M	252.02M	203.22M
Gross Profit	388.83M	328.82M	261.04M	215.64M	184.16M	149.96M
EBITDA	36.05M	24.41M	-6.82M	5.12M	31.95M	-18.15M
Net Income	406.20M	424.38M	-21.63M	-6.70M	-8.09M	-44.23M
Balance Sheet
Total Assets	3.02B	1.17B	558.74M	483.84M	344.36M	115.56M
Cash, Cash Equivalents and Short-Term Investments	71.92M	255.49M	296.22M	255.61M	254.60M	61.09M
Total Debt	924.87M	71.92M	72.08M	76.60M	53.91M	424.90M
Total Liabilities	1.03B	139.34M	149.09M	145.45M	82.27M	460.17M
Stockholders Equity	1.97B	1.01B	354.33M	269.52M	197.03M	-344.61M
Cash Flow
Free Cash Flow	85.17M	69.06M	78.98M	50.25M	-1.67M	-10.29M
Operating Cash Flow	91.94M	74.32M	84.60M	58.01M	3.36M	-6.49M
Investing Cash Flow	-986.26M	-55.65M	-95.06M	-76.55M	-5.03M	-3.81M
Financing Cash Flow	771.54M	-61.67M	-19.29M	16.23M	195.29M	51.04M

Clearwater Analytics Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 19.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWAN, the sentiment is Negative. The current price of 19.04 is above the 20-day moving average (MA) of 18.04, below the 50-day MA of 19.05, and below the 200-day MA of 23.21, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 58.23 is Neutral, neither overbought nor oversold. The STOCH value of 91.09 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CWAN.

Clearwater Analytics Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWAN	74 Outperform	$5.54B	12.04	34.61%	―	36.68%	―
FROG	66 Neutral	$5.60B	―	-11.15%	―	21.97%	-69.32%
QTWO	65 Neutral	$3.79B	1,022.68	0.92%	―	13.34%	―
GTM	64 Neutral	$3.34B	41.48	5.22%	―	-0.54%	626.94%
INTA	63 Neutral	$3.13B	―	-3.95%	―	17.09%	48.66%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	61 Neutral	$635.64M	―	-32.50%	―	14.79%	27.52%

Clearwater Analytics Holdings Corporate Events

Clearwater Analytics Announces $100M Share Buyback Program

On September 3, 2025, Clearwater Analytics Holdings announced a $100 million share repurchase program for its Class A common stock, aimed at offsetting the dilutive impact of recent share issuances and reducing the public float. The program reflects the company’s commitment to deleveraging, with plans to reduce its debt-to-EBITDA ratio below 3.0 by December 2026, leveraging significant excess free cash flows for 2025 and 2026.

Clearwater Analytics Expands Board with New Appointments

On July 31, 2025, Clearwater Analytics Holdings appointed Bas NieuweWeme to its Board of Directors, effective immediately, with a term expiring in 2028. NieuweWeme, who has extensive experience in asset management, will receive compensation in cash and restricted stock units. Additionally, on August 5, 2025, Clearwater announced the appointment of Dr. Mukesh Aghi and Bas NieuweWeme as new independent board members to accelerate international growth and innovation. Their expertise in asset management, M&A, and platform expansion is expected to enhance Clearwater’s global presence and platform capabilities, particularly in the Asia-Pacific and European markets.

Clearwater Analytics Holds Annual Stockholders Meeting

On June 23, 2025, Clearwater Analytics Holdings held its Annual Meeting of Stockholders, where stockholders voted on two proposals. The first proposal involved the election of three directors, Mukesh Aghi, Jacques Aigrain, and Lisa Jones, to serve until the 2028 Annual Meeting. The second proposal ratified KPMG LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

Clearwater Analytics Finalizes Share Conversion to Simplify Voting

On June 12, 2025, Clearwater Analytics Holdings, Inc. completed the automatic conversion of all outstanding shares of Class C and Class D Common Stock into Class B and Class A Common Stock, respectively, following the sale of shares by investment funds associated with Welsh Carson Anderson & Stowe. This conversion eliminated super-voting shares, transitioning the company to a one-share, one-vote structure, which reflects its shareholder base as a broadly held public company. The conversion did not impact the economic interests of shareholders or the total number of outstanding shares, but it did reduce the number of authorized shares by retiring the converted shares.