CFLT - Confluent sinks even as Wolfe Research says it has 'massive' opportunity ahead of it

2023-06-20 10:41:33 ET

Confluent ( NASDAQ: CFLT ) shares fell more than 3% on Tuesday even as investment firm Wolfe Research started coverage on the software company, noting it has a "massive" opportunity ahead of it due to the explosion of real-time data.

Analyst Allan Verkhovski put a peer perform rating and a fair value range of $27 to $36 on Confluent ( CFLT ), pointing out that with the world moving to leverage real-time data, Confluent is likely to benefit from this trend, as well as generative AI.

"This proliferation of data and applications pressed the tech stacks for managing operational and analytical data to be more convoluted than ever, which CFLT is solving through embodying a central nervous system for data across the enterprise," Verkhovski wrote in an investor note.

Verkhovski also noted that the company's integration of Flink, via its acquisition of Immerok, is allowing it to get an app store with the "best front-end tool" to build new data applications.

"A lot will come down to execution, but we are bullish on Flink being a [total addressable market] accelerant for CFLT and incorporate it into our upside model ($86M of revenue in FY25), in which we see revenue acceleration next year and 11% upside to consensus in FY25," Verkhovski added.

More on Confluent

• Confluent: The Stock Is Finally Reflecting The Company's Value
• Snowflake jumps as Stifel sees signs cloud headwinds may be 'stabilizing'
• MongoDB, Confluent rise as Morgan Stanley upgrades on faster cloud transitions

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