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Citi began coverage of Clearwater Analytics (NYSE:CWAN) with a Buy rating and a $28 price target.
The analysts said Clearwater is an attractive vertical software play on modern investment accounting and related front-to-back tech solutions.
The company is at an inflection point for several reasons, which include elevated new logo opportunity; multi-product transition supports higher Net Revenue Retention, or NRR, with a steadier organic and inorganic product sequence, the analysts noted.
In addition, Clearwater is at an inflection point due to — interest rate stability, with cuts as a potential AUM catalyst; Gen AI cost efficiency is being realized, and revenue opportunity is emerging; and Base plus pricing and public cloud transition flow through, according to the analysts. These opportunities indicate an ability to maintain or exceed current growth rates, and platform scalability steers continued profitability ramp, the analysts noted.
The analysts added that execution and expectations management at current valuation is essential. However, Clearwater’s platform and opportunity breadth suggest that risk/reward skews to the upside for this high-quality play.
Clearwater Analytics (CWAN) has a Buy rating at Seeking Alpha’s Quant Rating system, which consistently beats the market. Meanwhile, the Seeking Alpha authors’ average rating is also Buy, and so is the average Wall Street analysts’ rating, Buy.
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