Guggenheim downgrades Confluent, sees near-term upside priced in

As previously reported, Guggenheim analyst Howard Ma downgraded Confluent to Neutral from Buy and removed the firm’s previous $29 price target on the shares after having attended Confluent’s investor day. Management gave a comprehensive overview of Confluent’s value proposition, product evolution and roadmap, and updated financial targets and the session reinforced the firm’s belief that Apache Kafka is “a revolutionary technology” and that Confluent is “the category leader and only pure play at scale” that has built a competitive moat. However, despite continuing to believe in Confluent’s long-term opportunity, the firm believes that the near-term potential upside from Flink and AI use cases are “likely priced into shares,” the analyst tells investors.