Clearwater Analytics Gains As Investors Eye Growth Beyond Acquisition Jitters

Clearwater Analytics Holdings CWAN shares climbed Tuesday as investors looked past recent acquisition concerns, betting on sustained double-digit growth and fresh product rollouts to drive long-term momentum.

Goldman Sachs analyst Gabriela Borges upgraded Clearwater Analytics Holdings CWAN rating to Buy from Neutral with a price forecast of $27 on Monday.

Borges said the stock’s 30% drop over the past six months, compared with a 9% Nasdaq gain, reflects investor concerns over the quality of acquired assets and Clearwater’s ability to integrate multiple acquisitions simultaneously.

Also Read: Clearwater Analytics’ Enfusion Infusion Offers Compelling Value Proposition, Analyst Upgrades Stock

She argued those risks are now priced in and sees a clear catalyst path, including the September 3 Analyst Day.

Borges expects Clearwater’s core business to sustain 20%-plus annual growth over the next three to five years, driven by its automation platform, strong network effects, and cross-sell opportunities.

She said Clearwater’s net revenue retention (NRR) is already improving, with potential upside from cross-sell as the company releases about five new products annually, targeting growth in alternative investments through partnerships with Blackstone BX and PIMCO.

She added that macro tailwinds could further boost results. Goldman projects three consecutive 25-basis-point rate cuts starting in September, which would lift fixed-income asset prices, about 80% of Clearwater’s client AUM, and support revenue through its AUM-linked pricing model.

Increased capital market activity and IPO volume could also add one to two percentage points of growth in the corporate segment, which accounts for about 16% of revenue.

Borges acknowledged investor concerns about acquisition execution, citing mixed results with past deals and the challenge of integrating Enfusion, representing about 13% of run-rate sales.

Still, she forecasts Enfusion’s growth improving from 13% to 15% by 2027, short of management’s 20% target, but believes Clearwater can still achieve total business growth of 19%.

She noted Enfusion’s recent momentum, including a record-high bookings quarter and 49 new client wins in the second quarter.

Longer term, Borges is constructive on Clearwater’s plan to build an end-to-end platform with a single security master and data plane for institutional investors, capable of providing a complete, real-time portfolio view across public and private markets.

She believes the market underestimates the combined platform’s ability to reach a Rule of 40 profile, even before the vision is fully realized.

Price Action: CWAN shares traded higher by 3.55% to $19.11 at last check Tuesday.

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