Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $5.54B
• Dividend Yield: N/A
• Average Volume (3M): 4.32M
• 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: 97
• Industry: Software - Application
• EPS (TTM): 0.12
• Shares Outstanding: 287,938,750
• 10 Day Avg. Volume: 5,969,647
• 30 Day Avg. Volume: 4,319,608
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 12.35
• Enterprise Value/Gross Profit: 17.51
• Enterprise Value/Ebitda: 207.53
• 1Y Price Target: $29.65
• Price Target Upside: 56.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 69 Neutral
• Price Target: $21.50 ▲(13.46% Upside)

Clearwater Analytics Holdings' overall stock score reflects strong financial performance and positive earnings call sentiment, which are the most significant factors. However, the bearish technical indicators and valuation concerns slightly offset these strengths. The recent board expansion is a positive corporate event, contributing to the company's strategic growth potential.

Positive Factors

Acquisition Performance

Acquisitions trending ahead of expectations, with ENFN bookings setting a record and margins ahead of 400bps schedule with Bloomberg pipeline already building.

Automation and Efficiency

Clearwater’s platform automates traditionally manual processes, significantly reducing operational risk and eliminating manual tasks through automation of trade entry, reconciliations, and custodian interactions.

Business Growth

The core business is consistently growing at over 20% and still has a multi-year runway of share gains ahead.

Negative Factors

ARR Performance

Net new ARR of $19mm underperformed expectations and likely heightens investor skepticism about the company's ability to deliver full-year net new ARR of $95mm.

Churn Impact

Churn impacted net revenue retention by 2 points, although it was offset by gains in price, cross-sell, additional assets, and assets under management.

Investor Concerns

The stock is down 30% over the last 6 months, which is largely attributed to investor concerns regarding the quality of acquired assets and Clearwater’s progress on integration of multiple inorganic pieces of business at the same time.

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	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	32.81M	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: 18.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 18.95 is below the 20-day moving average (MA) of 20.50, below the 50-day MA of 21.67, and below the 200-day MA of 25.70, indicating a bearish trend. The MACD of -0.74 indicates Positive momentum. The RSI at 41.50 is Neutral, neither overbought nor oversold. The STOCH value of 36.68 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	79 Outperform	$8.72B	44.08	41.55%	0.14%	12.47%	65.19%
CVLT	75 Outperform	$8.56B	107.37	25.08%	―	21.62%	-53.99%
CWAN	69 Neutral	$5.54B	11.98	34.61%	―	36.68%	―
GTLB	62 Neutral	$6.48B	416.55	2.53%	―	29.31%	―
Sector *	61 Neutral	$36.32B	7.12	-7.26%	1.97%	7.79%	-9.36%
VERX	56 Neutral	$4.01B	235.54	-20.95%	―	15.00%	-349.61%
KC	52 Neutral	$3.84B	―	-33.09%	―	13.85%	3.47%

Clearwater Analytics Holdings Corporate Events

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.

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 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.