Confluent's Profitability Pivot And Growth Potential Drive Analyst Upgrade, Stock Rises

Shares of Confluent Inc CFLT were climbing higher on Wednesday, after remaining almost range bound through the week.

Confluent is making “a major pivot to profitability” and its large long-term growth opportunity remains intact, according to Morgan Stanley.

The Confluent Analyst: Sanjit Singh upgraded the rating for Confluent from Equal-Weight to Overweight, while raising the price target from $29 to $30.

The Confluent Thesis: The AlphaWise Cloud Optimization Survey indicates that more than 70% of respondents are actively undertaking cloud optimization initiatives, Singh said in the upgrade note.

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Companies that are currently optimizing or have plans to optimize “expect to see acceleration in 2024 and plan to have a higher percentage of their applications reside in the public cloud post optimization than what they had planned for pre-optimization,” the analyst further wrote.

Confluent has a “renewed commitment” to operational efficiency improvements and achieving profitability by the fourth quarter of 2023, he added.

CFLT Price Action: Shares of Confluent had risen by 6.25% to $24.83 at the time of publication on Wednesday.

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