Scotiabank has revised its price target for Confluent (CFLT, Financial), reducing it from $35 to $24, while maintaining a Sector Perform rating for the company's shares. This adjustment comes as part of a broader reevaluation of pricing targets within the U.S. software sector, following a recent downturn in the industry.
The firm highlighted that the focus will be on the potential tariff impacts, although these are anticipated to become significant in the second quarter and the latter half of the year. By adjusting the price targets, Scotiabank aims to better align with the current sector dynamics and expectations.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 32 analysts, the average target price for Confluent Inc (CFLT, Financial) is $35.40 with a high estimate of $42.00 and a low estimate of $25.00. The average target implies an upside of 53.98% from the current price of $22.99. More detailed estimate data can be found on the Confluent Inc (CFLT) Forecast page.
Based on the consensus recommendation from 34 brokerage firms, Confluent Inc's (CFLT, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Confluent Inc (CFLT, Financial) in one year is $43.44, suggesting a upside of 88.95% from the current price of $22.99. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Confluent Inc (CFLT) Summary page.
CFLT Key Business Developments
Release Date: February 11, 2025
- Subscription Revenue: Grew 24% to $250.6 million in Q4, representing 96% of total revenue.
- Confluent Cloud Revenue: Increased 38% to $137.9 million, accounting for 55% of subscription revenue.
- Confluent Platform Revenue: Grew 10% to $112.7 million, making up 45% of subscription revenue.
- Non-GAAP Operating Margin: Improved to 5.2% in Q4, exceeding guidance.
- Free Cash Flow Margin: Reached a record high of 11.1% in Q4.
- Net Income Per Share: $0.09 using 362.1 million diluted weighted average shares outstanding.
- Cash and Marketable Securities: Ended Q4 with $1.91 billion.
- Customer Growth: Ended fiscal year 2024 with approximately 5,800 customers, an increase of 840 customers.
- 100K+ ARR Customers: Grew 12% to 1,381, representing approximately 90% of revenue.
- 1 Million+ ARR Customers: Increased 23% to 194 customers.
- Net Revenue Retention (NRR): 117% in Q4.
- Gross Revenue Retention (GRR): Remained above 90%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Confluent Inc (CFLT, Financial) exceeded all guided metrics with a 24% growth in subscription revenue and a 38% increase in Confluent Cloud revenue.
- The company achieved a non-GAAP operating margin of 5%, marking its third consecutive positive quarter.
- Confluent Inc (CFLT) announced a major expansion of its strategic partnership with Databricks, enhancing real-time data capabilities for AI-driven decision-making.
- The introduction of Tableflow has been well-received, providing real-time, consistent, and secure data as structured tables in cloud object storage.
- Confluent Inc (CFLT) reported its first non-GAAP profitable year with a 26% growth in subscription revenue and a significant improvement in free cash flow margin.
Negative Points
- The company faces risks and uncertainties that could cause actual results to differ materially from forward-looking statements.
- Despite positive growth, the reliance on non-GAAP financial measures may present limitations in financial analysis.
- The transition to a consumption-driven go-to-market model may require ongoing adjustments and tuning.
- The competitive landscape includes potential acquisitions by competitors, such as Snowflake's interest in Redpanda, which could impact market dynamics.
- Confluent Inc (CFLT) must continue to navigate the complexities of integrating new technologies and partnerships, which could pose operational challenges.
