CWAN Stock Forecast & Price Target

Clearwater Analytics Holdings demonstrated strong financial performance, achieving a total revenue of $126.5 million, which reflects a robust year-over-year growth of 28% and surpassed consensus estimates by 5.1%. The company reported impressive non-GAAP gross margins of 78.8%, up approximately 180 basis points year-over-year, indicating enhanced profitability and contributing to an optimistic outlook. With a strategic expansion into front-office and middle-office capabilities through acquisitions, Clearwater is well-positioned for future growth and potential long-term operating margins exceeding 30%.

Clearwater Analytics faces several challenges that contribute to a negative outlook on its stock. Key risks include unexpected interest rate increases, acquisition and integration hurdles from recent purchases, and a competitive landscape with both larger incumbents and new entrants posing significant threats. Furthermore, Clearwater's revenue growth is assumed to decelerate through CY26, while its multi-class share structure and reliance on a more volatile hedge fund market introduce additional uncertainties.