CFLT - Confluent: A Promising Growth Story Given Increasing Usage On Platform And Robust Innovation

2024-04-21 14:05:15 ET

Summary

• Confluent is a data infrastructure platform focused on data in motion and has outperformed the S&P 500 and Nasdaq 100 YTD.
• The company expects to grow its revenue by 22.3% YoY to $950M and break even on non-GAAP operating income.
• Confluent is shifting to a consumption-oriented go-to-market model for Confluent Cloud to drive new customer acquisition and expand use cases, while innovating its fully-managed Apache Flink offering.
• While competitive risks remain and the company is yet to turn profitable, I believe the stock is attractively priced to drive sizable returns, making it a “buy”.

Introduction & Investment Thesis

Confluent (NASDAQ: CFLT ) is a data infrastructure platform focused on data in motion. The company has outperformed the S&P 500 and Nasdaq 100 YTD. It reported its Q4 FY23 earnings report in February, where revenue grew 33% YoY for the full fiscal year, while non-GAAP Operating Margin improved 2300 basis points to -7.4%, up from -30.4% a year earlier....

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