Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $6.25B
• Dividend Yield: N/A
• Average Volume (3M): 4.12M
• Price to Earnings (P/E): 13.3
• Beta (1Y): 0.84
• Revenue Growth: 23.21%
• EPS Growth: N/A
• Country: US
• Employees: 1,915
• Sector: Technology
• Sector Strength: 93
• Industry: Software - Application
• EPS (TTM): 0.13
• Shares Outstanding: 254,586,550
• 10 Day Avg. Volume: 3,173,930
• 30 Day Avg. Volume: 4,121,514
• PEG Ratio: 0.03
• Price to Book (P/B): 4.75
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 75.71
• Enterprise Value/Market Cap: 0.97
• Enterprise Value/Revenue: 3.44
• Enterprise Value/Gross Profit: 17.40
• Enterprise Value/Ebitda: 75.81
• 1Y Price Target: $31.80
• Price Target Upside: 43.24% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 78 Outperform
• Price Target: $26.00 ▲(17.12%Upside)

Clearwater Analytics Holdings is positioned strongly in its industry due to robust financial health and strategic acquisitions that promise growth. While technical indicators show mixed signals, the company's valuation is reasonable, and the earnings call reflected a positive outlook. Strategic corporate events further enhance growth potential, making it a promising investment despite some minor operational challenges.

Positive Factors

Financial Performance

Recent conversations with the CEO and CFO have increased confidence in the company's potential to deliver beats and raises, supporting 20%+ pro-forma growth durability.

Market Position

Clearwater is considered an extremely high-quality vertical software asset with potential for upward estimate revisions.

Strategic Partnerships

Clearwater announced a strategic partnership with Bloomberg to deliver a front-to-back solution for asset managers and asset owners.

Negative Factors

Integration Challenges

The integration roadmap related to recent acquisitions presents an end-to-end platform opportunity but may pose challenges in execution.

Market Valuation

Benchmarking of retention rates and revenue growth suggests Clearwater's stock is undervalued and could re-rate if it demonstrates 20%+ revenue growth, indicating current undervaluation concerns.

Resource Allocation

The partnership with Bloomberg is incremental to the Enfusion acquisition as it should have meaningfully lower resource intensity, but this implies previous resource allocation challenges.

Clearwater Analytics Holdings Business Overview & Revenue Model

Company Description

Clearwater Analytics Holdings, Inc. (CWAN) is a leading provider of SaaS-based investment accounting, reporting, and analytics solutions. The company serves a diverse range of clients including insurers, asset managers, corporations, and government entities. Clearwater Analytics' platform helps organizations streamline their investment accounting processes, offering real-time data aggregation, reconciliation, and comprehensive reporting capabilities.

How the Company Makes Money

Clearwater Analytics generates revenue primarily through subscription fees for its cloud-based software solutions. Clients pay recurring fees to access the platform's investment accounting and reporting services, which are tailored to meet the specific needs of different industries. The company's revenue model is bolstered by long-term contracts that provide a stable and predictable income stream. Additionally, Clearwater Analytics may engage in partnerships with financial institutions to expand its market reach and enhance its service offerings, although specific partnership details are not disclosed.

Clearwater Analytics Holdings Financial Statement Overview

Summary

Clearwater Analytics Holdings exhibits robust financial health with strong revenue growth, high profitability margins, and a stable balance sheet characterized by low leverage. The company's effective cash flow management further supports its growth trajectory, although certain income and cash flow components suggest the need for cautious interpretation.

Income Statement

Clearwater Analytics Holdings has demonstrated strong revenue growth with a significant increase from $451.8M to $475.9M in the TTM, translating to a 5.3% growth rate. The company achieved impressive gross and net profit margins at 72.9% and 90.1%, respectively, indicating robust profitability. The EBIT and EBITDA margins also show improvement, reflecting effective cost management and operational efficiency. However, the substantial net income can be attributed to other income or tax benefits, which warrants cautious optimism.

Balance Sheet

The balance sheet displays a solid equity base, with a debt-to-equity ratio of 0.06, indicating low financial leverage and reduced financial risk. The equity ratio of 86.8% also suggests a strong capital structure. However, the return on equity (ROE) calculation is skewed due to the high net income figure, potentially inflating the perceived returns. Overall, the balance sheet showcases financial stability with ample liquidity and low debt levels.

Cash Flow

Clearwater Analytics Holdings has demonstrated strong cash flow management, with a free cash flow of $83.5M in the TTM, representing a substantial increase from the previous period. The company maintains a healthy operating cash flow to net income ratio, indicating efficient cash conversion. The free cash flow to net income ratio is positive, supporting sustainable growth and financial flexibility. Nevertheless, fluctuations in investing and financing cash flows suggest potential volatility in future cash positions.

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

Clearwater Analytics Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 22.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 22.2 is above the 20-day moving average (MA) of 22.01, below the 50-day MA of 22.68, and below the 200-day MA of 26.21, indicating a bearish trend. The MACD of -0.19 indicates Negative momentum. The RSI at 43.00 is Neutral, neither overbought nor oversold. The STOCH value of 30.75 is Neutral, 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
PEGA	80 Outperform	$8.55B	48.60	39.29%	0.24%	14.29%	151.35%
CWAN	78 Outperform	$6.25B	13.33	58.14%	―	23.21%	―
CVLT	71 Outperform	$7.52B	101.27	25.23%	―	18.63%	-55.09%
Sector *	63 Neutral	$34.26B	5.42	-11.67%	1.85%	5.30%	-18.55%
GTLB	63 Neutral	$7.09B	426.98	2.53%	―	29.31%	―
VERX	58 Neutral	$5.62B	235.54	-19.65%	―	15.20%	-666.94%
KC	57 Neutral	$4.23B	―	-33.09%	―	13.85%	3.47%

Clearwater Analytics Holdings Corporate Events

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.

The most recent analyst rating on (CWAN) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Clearwater Analytics Holdings stock, see the CWAN Stock Forecast page.

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.

The most recent analyst rating on (CWAN) stock is a Hold with a $26.00 price target. To see the full list of analyst forecasts on Clearwater Analytics Holdings stock, see the CWAN Stock Forecast page.

Clearwater Analytics Completes Acquisition of Enfusion

On April 21, 2025, Clearwater Analytics completed its acquisition of Enfusion, valued at approximately $1.5 billion. This strategic move positions Clearwater as the first unified, cloud-native front-to-back platform for institutional investors, enhancing its market position by integrating Enfusion’s front-office capabilities with its existing middle and back-office solutions. The acquisition is expected to expand Clearwater’s total addressable market and international presence, offering seamless integration and operational efficiency across asset classes and geographies.