CFLT - 3 Reasons to Buy This Growth Stock With a $91 Billion Market on the Way
Confluent (NASDAQ: CFLT) reported its fourth-quarter earnings results on Feb. 10, blowing past analyst expectations. The company made $120 million in revenue, which topped estimates by $10 million. It also reported a less-than-expected net loss of $0.19 per share. Management continued to impress with guidance for first-quarter revenue of $118 million, representing growth of 53% year over year.
Despite these strong results, share prices of Confluent fell more than 21% after reporting, likely because of the company's high valuation: It traded above 40 times sales going into the quarter. With high valuations like that, sometimes beating expectations simply isn't enough.
But the share price drop might be a great buying opportunity for investors. The company is still in hypergrowth mode, and it is seeing lots of success expanding into the very lucrative cloud space. With risk being mitigated by Confluent's worldwide adoption, the future looks promising, which is why I see it as a buy today.
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3 Reasons to Buy This Growth Stock With a $91 Billion Market on the Way