1 week Ago
pcess609 I covered Clearwater Analytics ( NYSE: CWAN ) back in March of this year: Clearwater Analytics: Strong Business But Questionable Margin Trends As part of my analysis, I initiated a ‘Hold’ rating for the stock. I highlighted Clearwater’s steady revenue growth, as well as concerns about net revenue retention and pricing power. In this analysis, I will discuss my main takeaways from Clearwater’s Q1 2024 earnings report and earnings call , and issue a ‘Buy’ rating on the stock for long-term investors.
The thesis for my bullish rating is based on Clearwater's enhanced margin profile, improved revenue retention, and reasonable valuation given their potential for multiple expansion. Company Overview Clearwater Analytics is a developer of a cloud-based investment accounting and analytics software. Their customer base is made up of ~1,370 asset managers, corporations, insurers, and government agencies.
Their clients include household names such as Meta Platforms (NASDAQ: META ), T. Rowe Price (NASDAQ: TROW ), Zillow (NASDAQ: Z ), and many more. Today, Clearwater's clients have ~$7.
3 trillion of aggregated assets on the platform. Clearwater's platform aims to help clients consolidate what has traditionally been a patchwork of legacy software into a single location. Furthermore, it offers clients a comprehensive view of their portfolios, even if they are multi-asset, multi-basis, and multi-currency.
Clearwater estimates their global TAM to be $11 billion, $5.9 billi.
