Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $6.63B
• Dividend Yield: N/A
• Average Volume (3M): 2.87M
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.80
• Revenue Growth: 22.72%
• EPS Growth: N/A
• Country: US
• Employees: 1,915
• Sector: Technology
• Sector Strength: 69
• Industry: Software - Application
• EPS (TTM): 1.65
• Shares Outstanding: 254,584,340
• 10 Day Avg. Volume: 3,723,972
• 30 Day Avg. Volume: 2,874,162
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 21.11
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $34.13
• Price Target Upside: 48.97% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Clearwater Analytics Holdings demonstrates strong financial health and strategic growth initiatives, supported by robust earnings performance and strategic acquisitions. However, technical indicators suggest caution due to bearish momentum.

Positive Factors

Financial Performance

Clearwater Analytics Holdings, Inc. Class A reported strong first-quarter results with 24% revenue growth and 23% ARR growth.

Strategic Acquisitions

The integration of recently acquired assets is likely to create a more compelling end-to-end platform.

Negative Factors

Customer Retention

Net revenue retention ticked down slightly, indicating a modest impact on customer retention metrics.

Stock Performance

Clearwater has meaningfully underperformed vertical software peers due to event-driven arbitrage trades unwinding and a flurry of M&A deals.

Clearwater Analytics Holdings Business Overview & Revenue Model

Company Description

Clearwater Analytics Holdings, Inc. (CWAN) is a leading provider of cloud-based investment accounting, reporting, and analytics solutions for insurance companies, asset managers, corporations, and government entities. The company operates within the financial technology sector and offers an innovative platform that provides clients with a comprehensive view of their investment portfolios. Clearwater Analytics' core services include data aggregation, reconciliation, compliance, performance measurement, and risk analytics, empowering clients to make informed decisions and optimize their investment strategies.

How the Company Makes Money

Clearwater Analytics generates revenue primarily through a subscription-based model, where clients pay recurring fees to access its cloud-based platform. The company's key revenue streams include subscription fees for its software-as-a-service (SaaS) offering, which provides clients with continuous access to its investment accounting and analytics tools. Clearwater Analytics also benefits from long-term client relationships and high retention rates, as its platform is deeply integrated into clients' operations. Additionally, Clearwater leverages strong industry partnerships and collaborations to enhance its service offerings and expand its client base, contributing to its overall revenue growth.

Clearwater Analytics Holdings Financial Statement Overview

Summary

Clearwater Analytics Holdings exhibits robust financial health with strong revenue growth and healthy profit margins. The balance sheet shows low leverage and high equity, with significant net income driving return on equity. However, operational profitability is modest, indicating an area for improvement.

Income Statement

Clearwater Analytics Holdings shows strong revenue growth, with a significant increase from $368.2 million to $451.8 million in the TTM, reflecting a growth rate of 22.7%. The gross profit margin remains healthy at 72.8% in the TTM, indicating efficient cost management. The net profit margin improved drastically to 94.0% due to a notable net income increase, largely influenced by exceptional non-operating gains. However, EBIT and EBITDA margins are modest at 3.1% and 3.9%, respectively, suggesting core operational profitability is an area for improvement.

Balance Sheet

The company maintains a solid equity position with a high equity ratio of 86.2%, indicating low leverage and financial stability. The debt-to-equity ratio is low at 0.07, showcasing prudent debt management. Return on equity stands impressively at 42.1%, driven by the substantial net income. However, past equity deficits present potential long-term financial risks.

Cash Flow

Cash flow from operations is strong, supporting a high operating cash flow to net income ratio of 0.18, which demonstrates efficient cash conversion from operations. Free cash flow also remains healthy with a slight decline to $69.3 million. Free cash flow growth rate is negative compared to the previous year, but the company shows a consistent ability to generate cash, bolstering financial flexibility.

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
	EBIT
12.23M	-16.75M	5.12M	38.76M	-20.42M
	EBITDA
24.41M	-6.82M	5.12M	31.95M	-18.15M
	Net Income Common Stockholders
424.38M	-21.63M	-6.70M	-8.09M	-44.23M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
255.49M	296.22M	255.61M	254.60M	61.09M
	Total Assets
1.17B	558.74M	483.84M	344.36M	115.56M
	Total Debt
71.92M	72.08M	76.60M	53.91M	424.90M
	Net Debt
-105.43M	-149.69M	-174.13M	-200.69M	363.82M
	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: Neutral
• Last Price: 22.91
• 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 Neutral. The current price of 22.91 is above the 20-day moving average (MA) of 22.83, below the 50-day MA of 25.97, and below the 200-day MA of 26.34, indicating a neutral trend. The MACD of -0.83 indicates Negative momentum. The RSI at 43.69 is Neutral, neither overbought nor oversold. The STOCH value of 69.56 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	76 Outperform	$6.63B	13.92	58.14%	―	22.72%	―
PEGA	76 Outperform	$7.88B	44.78	39.29%	0.13%	14.29%	151.38%
CVLT	76 Outperform	$7.30B	98.41	25.23%	―	18.63%	-55.09%
VERX	69 Neutral	$6.31B	235.54	-24.39%	―	16.49%	-279.46%
Sector *	60 Neutral	$10.95B	10.52	-7.07%	3.00%	7.30%	-12.04%
GTLB	59 Neutral	$6.87B	―	-0.20%	―	30.93%	99.45%
KC	51 Neutral	$3.93B	―	-32.59%	―	8.56%	13.34%

Clearwater Analytics Holdings Corporate Events

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.

Spark’s Take on CWAN Stock

According to Spark, TipRanks’ AI Analyst, CWAN is a Outperform.

Clearwater Analytics Holdings is well-positioned with strong financial performance and strategic growth initiatives. Key strengths include robust revenue growth and strategic acquisitions, although technical indicators suggest caution with bearish momentum. Valuation appears fair, and the company’s strategic outlook remains positive despite operational profitability challenges.

To see Spark’s full report on CWAN stock, click here.

Clearwater Analytics Expands with Strategic Acquisitions

On March 11, 2025, Clearwater Analytics Holdings announced two strategic acquisitions, Beacon and Blackstone’s Bistro, to enhance its investment management technology platform. The acquisition of Beacon, a leader in cross-asset class modeling and risk analytics, and Bistro, a portfolio visualization software, aims to provide a unified, real-time view of portfolios, thereby improving risk management and operational efficiency for institutional investors. This move positions Clearwater as a comprehensive solution provider in the investment management industry, promising enhanced transparency and decision-making capabilities for stakeholders.

Clearwater Analytics Awaits Enfusion Acquisition Completion

On February 26, 2025, Clearwater Analytics Holdings announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for its proposed acquisition of Enfusion. This expiration satisfies a key condition for the transaction, which is expected to close in the second quarter of 2025, pending customary closing conditions and Enfusion shareholder approval. The acquisition aims to integrate Enfusion’s operations and technology with Clearwater’s, potentially enhancing their competitive position and growth opportunities in the investment management industry.