Clearwater Analytics Holdings (CWAN) AI Stock Analysis

• Market Cap: $5.38B
• Dividend Yield: N/A
• Average Volume (3M): 4.11M
• Price to Earnings (P/E): 11.6
• Beta (1Y): 0.82
• Revenue Growth: 36.68%
• EPS Growth: N/A
• Country: US
• Employees: 1,915
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.12
• Shares Outstanding: 287,938,750
• 10 Day Avg. Volume: 4,261,139
• 30 Day Avg. Volume: 4,110,072
• 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: 1.26
• Enterprise Value/Revenue: 12.35
• Enterprise Value/Gross Profit: 17.51
• Enterprise Value/Ebitda: 188.88
• 1Y Price Target: $30.57
• Price Target Upside: 66.05% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 9

• Rating: 75 Outperform
• Price Target: $20.50 ▲(11.35% Upside)

Clearwater Analytics Holdings shows strong financial performance with impressive revenue growth and profitability metrics. The positive sentiment from the earnings call, highlighting significant growth and successful integration of acquisitions, further supports the stock's potential. However, technical indicators suggest a bearish trend, and operational efficiency needs attention to maintain sustainable profit margins.

Positive Factors

Revenue Growth

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

Strategic Partnerships

The partnership with Bloomberg enhances Clearwater's service offerings and market reach, potentially driving client acquisition and retention over the long term.

Cash Flow Management

Improved cash generation capabilities support Clearwater's ability to reinvest in growth initiatives and maintain financial flexibility.

Negative Factors

GAAP Loss

The GAAP loss reflects acquisition-related costs, which could pressure profitability and require careful management to ensure long-term financial health.

Operational Efficiency

Low EBIT and EBITDA margins indicate potential inefficiencies, which could impact long-term profitability if not addressed.

Variable Retention Rates

Variable retention rates for Enfusion may challenge Clearwater's ability to maintain consistent revenue streams and client loyalty.

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 a subscription-based model, where clients pay for access to its software and services. The company offers tiered pricing based on the size of the client's assets under management (AUM) and the specific features they utilize. Key revenue streams include fees from software subscriptions, professional services for implementation and training, and ongoing support and maintenance. Additionally, Clearwater has formed strategic partnerships with financial institutions and technology providers, enhancing its service offerings and expanding its market reach, which contributes significantly to its earnings.

Clearwater Analytics Holdings Financial Statement Overview

Summary

Clearwater Analytics Holdings demonstrates strong financial performance with impressive revenue growth and profitability metrics. The balance sheet is solid with manageable leverage, and cash flows are improving, supporting the company's growth trajectory. However, attention should be given to operational efficiency and maintaining sustainable profit margins to ensure long-term success.

Income Statement

Clearwater Analytics Holdings shows strong revenue growth with a 15.79% increase in TTM, indicating robust demand for its software solutions. The gross profit margin remains healthy at 70.56%, reflecting efficient cost management. However, the net profit margin is exceptionally high at 73.71%, likely due to one-time gains or accounting adjustments, which may not be sustainable. EBIT and EBITDA margins are relatively low, suggesting room for improvement in operational efficiency.

Balance Sheet

The company's balance sheet is stable with a manageable debt-to-equity ratio of 0.47, indicating prudent leverage. The return on equity is strong at 36.15%, showcasing effective use of shareholder funds. However, the equity ratio is moderate, suggesting a balanced approach to financing with both debt and equity. The company should continue to monitor its debt levels to maintain financial flexibility.

Cash Flow

Cash flow analysis reveals a positive trajectory with a 2.01% growth in free cash flow, indicating improved cash generation capabilities. The operating cash flow to net income ratio is 0.72, suggesting that a significant portion of net income is backed by cash flow. The free cash flow to net income ratio is high at 0.93, reflecting strong cash conversion. Continued focus on cash flow management will be crucial for sustaining growth.

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	36.05M	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: 18.41
• 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 Negative. The current price of 18.41 is above the 20-day moving average (MA) of 18.38, below the 50-day MA of 18.88, and below the 200-day MA of 22.88, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 44.27 is Neutral, neither overbought nor oversold. The STOCH value of 27.44 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
CWAN	―	$5.38B	11.64	34.61%	―	36.68%	―
QTWO	―	$3.91B	1,021.37	0.92%	―	13.34%	―
FROG	―	$5.54B	―	-11.15%	―	21.97%	-69.32%
GTM	―	$3.58B	42.87	5.22%	―	-0.54%	626.94%
INTA	―	$3.14B	―	-3.95%	―	17.09%	48.66%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
SPT	―	$604.44M	―	-32.50%	―	14.79%	27.52%

Clearwater Analytics Holdings Corporate Events

Clearwater Analytics Announces $100M Share Buyback Program

On September 3, 2025, Clearwater Analytics Holdings announced a $100 million share repurchase program for its Class A common stock, aimed at offsetting the dilutive impact of recent share issuances and reducing the public float. The program reflects the company’s commitment to deleveraging, with plans to reduce its debt-to-EBITDA ratio below 3.0 by December 2026, leveraging significant excess free cash flows for 2025 and 2026.

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.

Clearwater Analytics Reports Strong Q2 Growth Amid Challenges

Clearwater Analytics Holdings, Inc. Class A recently held an earnings call that painted a picture of robust growth and strategic advancement. The sentiment was largely positive, driven by impressive revenue growth and successful integration of acquisitions. However, there were some concerns regarding the GAAP loss and Enfusion’s profitability challenges.

Clearwater Analytics Reports Strong Q2 2025 Results

Clearwater Analytics Holdings, Inc. is a leading provider of a comprehensive cloud-native platform for investment management, serving institutional investors across global public and private markets. The company integrates portfolio management, trading, investment accounting, and risk analytics into a unified system, supporting over $8.8 trillion in assets globally.

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.