Latest news with #CFLT
Yahoo
4 days ago
- Business
- Yahoo
1 Under-the-Radar AI Stock With 50% Upside Potential
In today's increasingly digital world, the speed at which data is captured, processed, and acted upon is critical. That's where Confluent (CFLT), a technology company valued at a market capitalization of $8.1 billion, enters the picture. Founded by the original creators of Apache Kafka, Confluent provides a cloud-native data infrastructure platform that enables organizations to connect, store, and process real-time data streams at scale. Confluent stock has dipped 14% year-to-date (YTD), compared to the S&P 500 Index's ($SPX) gain of 1.9% YTD. Nonetheless, Wall Street believes CFLT stock has more than 50% upside potential over the next year. Let's see whether the stock is currently a buy. Confluent follows a hybrid business model, providing both a self-managed software platform and a fully managed cloud offering. Subscriptions and usage-based pricing, which are increasingly popular among large enterprises due to their flexibility and scalability, generate revenue for the company. Is Palantir Stock Poised to Surge Amidst the Israel-Iran Conflict? CoreWeave Stock Is Too 'Expensive' According to Analysts. Should You Sell CRWV Now? Grains, Unrest, & Gold: What Middle East Tensions Mean for Your Portfolio Now Our exclusive Barchart Brief newsletter is your FREE midday guide to what's moving stocks, sectors, and investor sentiment - delivered right when you need the info most. Subscribe today! Despite a cautious enterprise cloud-spending environment, the company's first-quarter results for fiscal 2025 showed increasing momentum in subscription revenue, hybrid deployments, and new-generation offerings such as Apache Flink and Tableflow. Total revenue increased 25% year on year to $271.1 million, with adjusted earnings increasing by an impressive 60% to $0.08 per share. During the Q1 earnings call, management emphasized that the company's focus on long-term platform expansion is beginning to pay off, despite the fact that macroeconomic pressures remain, particularly in large-scale enterprise consumption. Net retention reached 117% in Q1, demonstrating customer trust in Confluent's platform. Confluent generated $260.9 million in subscription revenue during Q1, up 26% year on year (YOY) and accounting for 96% of total revenue. Confluent Cloud, a fully managed, cloud-native product, generated $142.7 million, a 34% increase YOY. Furthermore, demand for hybrid and on-premises deployments enabled the company's self-managed Confluent Platform to generate a healthy $118.2 million in revenue, up 18% from the previous year. Management stated that Confluent Platform had its best first-quarter performance in three years. Confluent's growth strategy is heavily reliant on migrating the estimated 150,000 organizations that still use open-source Kafka. Confluent added 340 net new customers during the period, marking its best quarterly performance in three years. Confluent's balance sheet showed $1.9 billion in cash, cash equivalents, and marketable securities at the quarter's end. The company also generated $4.9 million in positive free cash flow (FCF) during the quarter, a sign of cost discipline. Management reaffirmed its fiscal 2025 guidance with cautious optimism. Subscription revenue could increase by 19% to 20%, reaching $1.1 billion. Likewise, adjusted net income per share could be around $0.36 per share, compared to $0.29 in fiscal 2024. Additionally, analysts predict earnings will rise by 30.7% to $0.47 by fiscal 2026. Despite being a small company, Confluent is rapidly growing. Its inclusion in mission-critical workloads is what distinguishes it. This technology is not experimental. In fact, it provides real-time network solutions to a variety of industries, including telecommunications, retail logistics and supply chain, and financial services fraud detection. On Wall Street, CFLT stock is rated as a 'Moderate Buy.' Of the 31 analysts covering the stock, 20 rate CFLT as a 'Strong Buy,' three recommend it as a 'Moderate Buy,' seven call it a "Hold,' and one suggests that it is a 'Moderate Sell.' The average target price of $28.14 per share suggests an upside of 17.5% above current levels. The Street-high target price of $36 implies that shares could rally 50.4% over the next 12 months. As the demand for real-time data infrastructure increases, particularly in artificial intelligence (AI) and edge computing, so will the demand for the Confluent's services. For long-term investors, Confluent provides an appealing combination of secular tailwinds, a deep technical moat, high gross margins, and a strong cloud growth engine. However, as a high-growth stock, it trades at a premium of 66x forward earnings. Consequently, risk-averse investors may want to wait for a better entry point. On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on
Globe and Mail
13-06-2025
- Business
- Globe and Mail
Where Will Confluent Stock Be in 3 Years?
It has been just under four years since Confluent (NASDAQ: CFLT) made its stock market debut in June 2021. A look at its stock price chart will show that investors in the data streaming specialist have endured a difficult time since November of that same year. Confluent stock was in fine form in 2021 following its initial public offering. However, like many other young tech stocks in late 2021, the stock price began a downhill run late in the year. Some of these stocks eventually recovered. In Confluent's case, the stock lost 46% of its value since its initial public offering (IPO) and 74% when compared to its all-time high. Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » Let's check why that has been the case and see if this cloud computing stock has the ability to regain its mojo and jump higher over the next three years. Confluent's expensive valuation has been the stock's undoing Confluent was trading at a whopping 37 times sales in 2021, which means that it needed to maintain high growth rates to justify its rich valuation. However, its sales growth rates have been dropping over the years, as we can see from the table below. Data source: Confluent quarterly reports. The reduction in Confluent's top-line growth is a big reason why the stock has fallen out of investors' favor. As a result, it is now trading at just under 8 times sales, which is lower than its five-year average price-to-sales ratio of 12. Another thing worth noting is that Confluent's sales multiple is now in line with the U.S. technology sector's average sales multiple. Buying Confluent at its current valuation could turn out to be a smart long-term move, as the company is now sitting on an added catalyst in the form of artificial intelligence (AI). Confluent's cloud-based data streaming platform is used by customers to bring data out of silos and connect it in real time to make decisions quickly. The company's platform finds applications in multiple areas such as inventory management, fraud detection, and customer service. It's now being applied in generative AI and agentic AI applications as well, as Confluent's platform allows customers to use relevant data in real time for training large language models (LLMs) and AI agents. As a result, Confluent is now winning a bigger share of customers' wallets, along with bringing new customers into its fold, which should set the company up for robust long-term growth. A massive addressable market points toward better times for the company Confluent now sees its addressable market exceeding $100 billion this year. That's double its estimated addressable market four years ago. Even better, the accelerated growth in its customer base suggests that it is well on track to capitalize on this massive opportunity. Confluent's overall customer base jumped by 20% year over year in the first quarter of 2025. That was a major improvement over the 9% year-over-year increase in its customer base in the year-ago period. Importantly, Confluent is gaining more business from its existing customers. This can be judged from the company's dollar-based net retention rate of 117%, a metric that compares its annual recurring revenue (ARR) from customers at the end of a quarter to the ARR from the same customer cohort in the year-ago period. So, an ARR of more than 100% suggests that existing customers are spending more money with Confluent. The higher spending by Confluent's older customers is also driving a solid bump in its margins. The company's non- GAAP operating margin increased by six percentage points year over year in Q1. This explains why the company's non-GAAP earnings increased by 60% from the year-ago period to $0.08 per share. The company has guided for $0.36 per share in earnings for 2025, which points toward a 24% increase from last year. However, don't be surprised to see Confluent doing better than that following the healthy increase in Q1, especially considering the pace at which it is adding new customers and encouraging existing ones to spend more money. Not surprisingly, analysts are forecasting an acceleration in Confluent's bottom-line growth over the next couple of years. Data by YCharts. The stronger growth in Confluent's earnings in 2026 and 2027 points toward better times for the stock over the next three years, as the market could reward this impressive bottom-line jump with healthy gains. As such, buying Confluent right now makes sense from a long-term point of view. The correction in the company's stock price since its IPO has made it a better buy, considering its lucrative end-market opportunity and bright prospects. Should you invest $1,000 in Confluent right now? Before you buy stock in Confluent, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Confluent wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $657,871!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $875,479!* Now, it's worth noting Stock Advisor 's total average return is998% — a market-crushing outperformance compared to174%for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of June 9, 2025
Yahoo
09-06-2025
- Business
- Yahoo
2 Reasons to Like CFLT (and 1 Not So Much)
What a brutal six months it's been for Confluent. The stock has dropped 24.6% and now trades at $24.48, rattling many shareholders. This might have investors contemplating their next move. Following the pullback, is now the time to buy CFLT? Find out in our full research report, it's free. Started in 2014 by the team of engineers at LinkedIn who originally built it as an internal tool, Confluent (NASDAQ:CFLT) provides infrastructure software for organizations that makes it easy and fast to collect and move large amounts of data between different systems. Billings is a non-GAAP metric that is often called 'cash revenue' because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract. Confluent's billings punched in at $267.3 million in Q1, and over the last four quarters, its year-on-year growth averaged 27.9%. This performance was fantastic, indicating robust customer demand. The high level of cash collected from customers also enhances liquidity and provides a solid foundation for future investments and growth. Forecasted revenues by Wall Street analysts signal a company's potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger. Over the next 12 months, sell-side analysts expect Confluent's revenue to rise by 17.4%. While this projection is below its 32.5% annualized growth rate for the past three years, it is commendable and implies the market is baking in success for its products and services. While many software businesses point investors to their adjusted profits, which exclude stock-based compensation (SBC), we prefer GAAP operating margin because SBC is a legitimate expense used to attract and retain talent. This is one of the best measures of profitability because it shows how much money a company takes home after developing, marketing, and selling its products. Confluent's expensive cost structure has contributed to an average operating margin of negative 40.2% over the last year. This happened because the company spent loads of money to capture market share. As seen in its fast revenue growth, the aggressive strategy has paid off so far, and Wall Street's estimates suggest the party will continue. We tend to agree and believe the business has a good chance of reaching profitability upon scale. Confluent has huge potential even though it has some open questions. After the recent drawdown, the stock trades at 6.8× forward price-to-sales (or $24.48 per share). Is now a good time to initiate a position? See for yourself in our in-depth research report, it's free. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
23-05-2025
- Business
- Yahoo
5 Big Data Stocks to Buy for Stellar Returns in the Short Term
Big Data refers to a vast and diverse collection of structured, unstructured and semi-structured data that inundates businesses on a day-to-day basis. The big data space focuses on companies that process, store and analyze data, and provide data mining, transformation, visualization and predictive analytics tools. Here, we have selected five such companies — Confluent Inc. CFLT, Blackbaud Inc. BLKB, Sprout Social Inc. SPT, HubSpot Inc. HUBS and Teradata Corp. TDC. These stocks have double-digit short-term price upside potential. Each of our picks carries either a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Big Data is utilized in advanced analytics applications like predictive modeling and machine learning to solve business problems and make informed decisions. The latest high-end digital mobility advancements, including the Internet of Things (IoT) and artificial intelligence (AI), have led to rapid growth in data. Consequently, new big data tools have emerged to collect, process, and analyze data to derive maximum value out of it. Big data offers corporations better decision-making and risk management abilities. It has also increased agility and innovation, making operations more efficient and resulting in improved customer experiences. The chart below shows the price performance of our five picks in the past month. Image Source: Zacks Investment Research Zacks Rank #2 Confluent operates a data streaming platform in the United States and internationally. CFLT provides platforms that allow customers to connect their applications, systems, and data layers comprising Confluent Cloud, a managed cloud-native software-as-a-service (SaaS), and Confluent Platform, an enterprise-grade self-managed software. CFLT serves banking and financial services, retail and ecommerce, manufacturing, automotive, telecommunication, gaming, insurance, and technology industries, as well as the public sector. CFLT has an expected revenue and earnings growth rate of 19% and 32.4%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 20.5% in the past 30 days. The short-term average price target of brokerage firms for the stock represents an increase of 28.9% from the last closing price of $21.05. The brokerage target price is currently in the range of $22-$36. This indicates a maximum upside of 71% and no downside. Zacks Rank #1 Blackbaud is engaged in the provision of cloud software and services in the United States and internationally. BLKB's first-quarter 2025 results reflect solid execution of its strategic goals, with organic revenue growth, improved profitability and stock buybacks. BLKB remains on track to achieve Rule of 45 status by 2030 and expects continued free cash flow margin expansion. Robust free cash flow cushions BLKB's stock repurchase strategy. In the first quarter, BLKB repurchased around 4% of its outstanding shares, aligning with its 2025 plan to buy back 3% to 5%. Adjusted EBITDA margin reached 34.3% in the first quarter. For 2025, Blackbaud expects adjusted EBITDA margin in the range of 34.9% to 35.9%. Blackbaud has an expected revenue and earnings growth rate of -3.1% and 17.9%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 8.4% in the past 30 days. The short-term average price target of brokerage firms for the stock represents an increase of 10.7% from the last closing price of $62.12. The brokerage target price is currently in the range of $60-$85. This indicates a maximum upside of 36.8% and a maximum downside of 3.4%. Zacks Rank #2 Sprout Social designs, develops, and operates a web-based social media management platform in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. SPT provides cloud software for social messaging, data and workflows in a unified system of record, intelligence, and action. SPT offers AI-powered solutions, such as publishing and scheduling, social customer care, reporting and analytics, social listening and business intelligence, reputation management, social commerce, influencer marketing, employee advocacy, and automation and workflows. Sprout Social has an expected revenue and earnings growth rate of 11.3% and 20.6%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 10.3% in the past 30 days. The short-term average price target of brokerage firms for the stock represents an increase of 30.7% from the last closing price of $21.55. The brokerage target price is currently in the range of $18-$42. This indicates a maximum upside of 94.9% and a maximum downside of 16.5%. Zacks Rank #2 HubSpot provides a cloud-based customer relationship management platform for businesses in the Americas, Europe, and the Asia Pacific. HUBS is witnessing steady multi-hub adoption from enterprise customers in the premium market. Pricing optimization in HUBS' starter edition is leading to solid client additions in the lower end of the market. The integration of HubSpot AI, which includes state-of-the-art features, such as AI assistance, AI agents, AI insights and ChatSpot, is driving more value to customers. HUBS' seat pricing model lowers the barrier for customers to get started with its business and mitigates pricing friction for upgrades. The growing adoption of inbound applications is a tailwind. HubSpot has an expected revenue and earnings growth rate of 15.4% and more than 100%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has improved 49% in the past 30 days. The short-term average price target of brokerage firms for the stock represents an increase of 19% from the last closing price of $621.25. The brokerage target price is currently in the range of $645-$930. This indicates a maximum upside of 49.7% and no downside. Zacks Rank #2 Teradata provides a connected hybrid cloud analytics and data platform in the United States and internationally. TDC is benefiting from strong cloud ARR growth. TDC's AI and hybrid cloud innovations, supported by strategic partnerships with NVIDIA, Microsoft, and Google are strengthening its market position. TDC's advanced AI solutions, particularly in Customer Experience AI, are in high demand as businesses prioritize data-driven insights. TDC's expertise in providing scalable, cloud-based analytics positions it well in growing markets like AI, data centers, and digital transformation. Teradata has an expected revenue and earnings growth rate of -6.5% and -2.1%, respectively, for the current year. The Zacks Consensus Estimate for current-year earnings has remained unchanged in the past 30 days. The short-term average price target of brokerage firms for the stock represents an increase of 18.7% from the last closing price of $21.82. The brokerage target price is currently in the range of $21-$35. This indicates a maximum upside of 60.4% and a maximum downside of 3.8%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Teradata Corporation (TDC) : Free Stock Analysis Report Blackbaud, Inc. (BLKB) : Free Stock Analysis Report HubSpot, Inc. (HUBS) : Free Stock Analysis Report Sprout Social, Inc. (SPT) : Free Stock Analysis Report Confluent, Inc. (CFLT) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
16-05-2025
- Business
- Yahoo
Jim Cramer on Confluent, Inc. (CFLT): ‘I'm Not Going To Recommend The Stock Here'
We recently published an article titled In this article, we are going to take a look at where Confluent, Inc. (NASDAQ:CFLT) stands against the other stocks Jim Cramer recently talked about. During the most recent episode of Mad Money, which aired on Monday, the 12th of May, Jim Cramer discussed the recent market rally and encouraged his viewers to stay invested. He also emphasized the importance of earnings, saying: 'Earnings matter again, okay? That's what happened last night when the United States and China reached an agreement, however temporary, to hold off trade armageddon. The rollback of the exorbitant tariffs to much more reasonable levels caused the stock market to explode.' READ ALSO: AND Although Cramer was happy about the market's recovery, he reminded his viewers that the S&P 500 is still flat on a year-to-date basis and discussed how other regions are doing: 'Now don't get me wrong, I'm glad it happened, but I just spent a week in Europe, and it is stunning how much better the markets are doing over there.' His final reminder was for his viewers to just stay invested in the market and avoid trying to time the market, saying: 'Bottom line: It's better to stay in, stay on, and let her ride than to try to pick the perfect moment to trade in and out and in and out of the stock market. By the way, that's not much of a strategy. It's more of a game of chicken where there are no winners, just losers who think they are smarter than the average bear.' For this article, we compiled a list of 10 stocks that were discussed by Jim Cramer during the Mad Money episode that aired on the 13th of May 2024. We then calculated their performance for the past 12 months, until May 13th, 2025, market close. We have also included the hedge fund sentiment for the stocks, which we sourced from Insider Monkey's Q4 2024 database of over 900 hedge funds. The stocks are listed in the order that Cramer mentioned them. Please note that this article mentions Jim Cramer's previous opinions and may not account for any changes to his opinions regarding the stocks that are mentioned. It is primarily an examination of how his previously provided opinions have panned out. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter's strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here). A team of consultants in suits, discussing the importance of stream governance for real-time was asked about Confluent, Inc. (NASDAQ:CFLT) by a longtime viewer impressed by its recent earnings beat. While acknowledging its potential at the time, Cramer voiced skepticism: "Oh my God, I mean — look, that is — Gregory is so right. If this gets together, this thing could just be a rocket ship. But if it doesn't — I'm going to have to say I think the chances are that it doesn't. And I'm not going to recommend the stock here." Jim Cramer's skepticism was well-placed, as the stock dropped 22.83% since his comment. Confluent, Inc. (NASDAQ:CFLT) is a data infrastructure company that builds real-time data streaming platforms based on Apache Kafka for enterprises. Overall CFLT ranks 1st on our list of the stocks Jim Cramer recently discussed. While we acknowledge the potential of CFLT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than CFLT but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock. READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires. Disclosure: None. This article is originally published at Insider Monkey. Sign in to access your portfolio
