In a report released yesterday, Derrick Wood from TD Cowen maintained a Hold rating on Confluent, with a price target of $24.00.
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Derrick Wood has given his Hold rating due to a combination of factors influencing Confluent’s current market position and future prospects. The company is expected to report a modest beat in its upcoming third-quarter results, but growth is anticipated to dip below the 20% mark due to slower new workload additions and revenue compression from OpenAI. Additionally, recent go-to-market changes and a focus on multi-product sales are expected to impact growth in the second half of the year.
Despite a recent rally in the stock price driven by speculation of a potential sale, the fundamental outlook suggests that shares may remain range-bound. The company’s cloud segment shows stability, but platform activity is softer, and Flink adoption is below expectations. While there are emerging AI opportunities and potential partnerships in the pipeline, these are still in the early stages and may take time to materialize. Overall, these mixed signals and growth pressures justify a Hold rating.
Based on the recent corporate insider activity of 94 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of CFLT in relation to earlier this year.