Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $6.23B
• Dividend Yield: N/A
• Average Volume (3M): 6.60M
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.76
• Revenue Growth: 50.91%
• EPS Growth: 54812.50%
• Country: US
• Employees: 1,915
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.14
• Shares Outstanding: 288,154,020
• 10 Day Avg. Volume: 7,184,804
• 30 Day Avg. Volume: 6,596,953
• 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: 0.97
• Enterprise Value/Revenue: 9.41
• Enterprise Value/Gross Profit: 13.74
• Enterprise Value/Ebitda: 99.01
• 1Y Price Target: $29.56
• Price Target Upside: 38.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 0.54
• Revenue Forecast (FY): $730.56M

• Rating: 79 Outperform
• Price Target: $24.50 ▲(15.08% Upside)

CWAN's strong financial performance and positive earnings call are the most significant factors driving its high score. The technical analysis supports a bullish outlook, while the valuation remains reasonable. The company's strategic growth initiatives and global expansion efforts further enhance its competitive position.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust demand for Clearwater's solutions, enhancing its market position and supporting long-term expansion.

Generative AI Advancements

Generative AI integration enhances operational efficiency and client offerings, providing a durable competitive advantage and supporting future growth.

Global Expansion

International expansion diversifies revenue streams and reduces dependency on any single market, strengthening Clearwater's global competitive position.

Negative Factors

Lower Net Revenue Retention

A decline in net revenue retention suggests challenges in upselling and maintaining existing client revenue, potentially impacting future growth.

Challenges with Enfusion Growth

Slower growth in acquired businesses like Enfusion may hinder integration benefits and delay expected synergies, affecting overall performance.

Lumpiness in ARR Growth

Inconsistent ARR growth due to deal timing can lead to unpredictable revenue streams, complicating strategic planning and financial forecasting.

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 shows strong revenue growth and profitability with a healthy gross profit margin. The balance sheet is stable with moderate leverage, and cash flow generation is robust despite recent declines in free cash flow growth. The company is well-positioned in the software application industry, though it should focus on improving operational efficiency and sustaining cash flow growth.

Income Statement

Clearwater Analytics Holdings has demonstrated strong revenue growth with a 16.2% increase in the TTM period, indicating robust demand for its software solutions. The gross profit margin remains healthy at 70.6%, reflecting efficient cost management. However, the net profit margin of 73.7% is unusually high due to a significant net income figure, which may include non-operational factors. EBIT and EBITDA margins are relatively low, suggesting room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet shows a moderate debt-to-equity ratio of 0.47, indicating a balanced approach to leverage. The return on equity is strong at 36.1%, showcasing effective use of shareholder funds. However, the equity ratio is moderate, suggesting a reliance on both equity and debt financing. Overall, the balance sheet reflects a stable financial position with manageable debt levels.

Cash Flow

Operating cash flow is healthy, with a coverage ratio of 0.72, indicating good cash generation relative to net income. The free cash flow to net income ratio is strong at 92.6%, reflecting efficient conversion of profits into cash. However, the free cash flow growth rate is negative, suggesting a recent decline in cash flow generation, which could be a concern if it persists.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	640.38M	451.80M	368.17M	303.43M	252.02M	203.22M
Gross Profit	438.83M	328.82M	261.04M	215.64M	184.16M	149.96M
EBITDA	60.88M	24.41M	-6.82M	10.26M	31.95M	-18.15M
Net Income	392.23M	424.38M	-21.63M	-7.97M	-8.21M	-44.23M
Balance Sheet
Total Assets	2.99B	1.17B	558.74M	481.94M	344.36M	115.56M
Cash, Cash Equivalents and Short-Term Investments	64.15M	255.49M	296.22M	255.61M	254.60M	61.09M
Total Debt	882.85M	71.92M	72.08M	76.60M	53.91M	424.90M
Total Liabilities	988.96M	139.34M	149.09M	143.56M	82.49M	460.17M
Stockholders Equity	1.98B	1.01B	354.33M	269.52M	196.87M	-344.61M
Cash Flow
Free Cash Flow	81.98M	69.06M	78.98M	50.25M	-1.67M	-10.29M
Operating Cash Flow	91.37M	74.32M	84.60M	58.01M	3.36M	-6.49M
Investing Cash Flow	-989.33M	-55.65M	-95.06M	-76.55M	-5.03M	-3.81M
Financing Cash Flow	731.02M	-61.67M	-19.29M	16.23M	195.29M	51.04M

Clearwater Analytics Holdings Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 21.29
• 50DMA: Positive
• 100DMA: Positive
• 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 Neutral. The current price of 21.29 is above the 20-day moving average (MA) of 19.69, above the 50-day MA of 18.81, and below the 200-day MA of 22.02, indicating a neutral trend. The MACD of 0.89 indicates Negative momentum. The RSI at 58.70 is Neutral, neither overbought nor oversold. The STOCH value of 61.31 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	79 Outperform	$6.23B	13.92	32.91%	―	50.91%	54812.50%
GTM	71 Outperform	$3.15B	31.94	6.51%	―	1.47%	1077.70%
QTWO	70 Outperform	$4.51B	149.03	5.68%	―	13.93%	―
FROG	70 Neutral	$7.07B	-85.51	-9.88%	―	22.69%	-32.47%
INTA	63 Neutral	$3.50B	―	-6.04%	―	17.11%	-19.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	61 Neutral	$592.09M	―	-26.69%	―	13.09%	32.34%

Clearwater Analytics Holdings Corporate Events

Clearwater Analytics Reports Strong Q3 Earnings Growth

Clearwater Analytics Holdings, Inc. (CWAN) recently held its earnings call, revealing a strong positive sentiment driven by significant revenue and ARR growth. The company’s successful acquisitions and strategic integration of businesses have been pivotal in achieving these results. Despite some challenges in maintaining consistent ARR growth and net revenue retention, CWAN’s advancements in Generative AI and its global expansion efforts underscore its solid competitive position in the market.

Clearwater Analytics Reports Strong Q3 2025 Growth

Clearwater Analytics Holdings, Inc., operating in the investment management technology sector, offers a comprehensive cloud-native platform for institutional investors, integrating various investment processes into a unified system. In its third quarter of 2025, Clearwater Analytics reported a significant revenue increase of 77% year-over-year, reaching $205.1 million. The company also achieved an adjusted EBITDA of $70.7 million, marking an 84% increase from the previous year, and utilized strong operating cash flows to repay $40 million of debt.

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.

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.