Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $7.05B
• Dividend Yield: N/A
• Average Volume (3M): 11.80M
• Price to Earnings (P/E): 15.7
• Beta (1Y): 0.77
• 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: 11,913,655
• 30 Day Avg. Volume: 11,795,296
• 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: 0.86
• Enterprise Value/Revenue: 9.41
• Enterprise Value/Gross Profit: 13.74
• Enterprise Value/Ebitda: 99.01
• 1Y Price Target: $27.83
• Price Target Upside: 15.53% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $27.00 ▲(12.08% Upside)

The score is led by strong financial performance and an especially upbeat earnings call (rapid revenue/ARR growth, improving margins, and very high retention). Valuation is reasonable on earnings, while technical indicators suggest the stock is extended in the short term. The announced take-private deal provides an additional supportive catalyst, pending approvals.

Positive Factors

Revenue Growth

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

High Gross Revenue Retention

High retention rates demonstrate customer satisfaction and loyalty, ensuring stable recurring revenue and reducing customer acquisition costs.

Generative AI Advancements

Integration of AI enhances operational efficiency and service offerings, positioning Clearwater as a tech leader and driving competitive advantage.

Negative Factors

Lumpiness in ARR Growth

Inconsistent ARR growth can lead to unpredictable revenue streams, potentially impacting financial planning and investor confidence.

Lower Net Revenue Retention

A decrease in net revenue retention suggests challenges in upselling or expanding existing accounts, which could hinder future revenue growth.

Negative Free Cash Flow Growth

Negative free cash flow growth may limit the company's ability to invest in new opportunities or manage debt, affecting long-term financial health.

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

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: Positive
• Last Price: 24.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWAN, the sentiment is Positive. The current price of 24.09 is above the 20-day moving average (MA) of 23.16, above the 50-day MA of 21.13, and above the 200-day MA of 21.31, indicating a bullish trend. The MACD of 0.87 indicates Positive momentum. The RSI at 71.28 is Negative, neither overbought nor oversold. The STOCH value of 21.49 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CWAN.

Clearwater Analytics Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QTWO	75 Outperform	$4.37B	144.28	5.68%	―	13.93%	―
CWAN	74 Outperform	$7.05B	15.75	32.91%	―	50.91%	54812.50%
FROG	73 Outperform	$7.11B	-86.03	-9.88%	―	22.69%	-32.47%
GTM	71 Outperform	$3.30B	33.40	6.51%	―	1.47%	1077.70%
INTA	63 Neutral	$3.62B	-126.27	-6.04%	―	17.11%	-19.12%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	61 Neutral	$629.99M	―	-26.69%	―	13.09%	32.34%

Clearwater Analytics Holdings Corporate Events

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.