5. Clearwater Analytics Holdings Inc. (NYSE:CWAN)
Beta: 0.69
Potential Upside: 19%
Number of Hedge Fund Holders: 48
Clearwater Analytics Holdings Inc. (NYSE:CWAN) provides cloud-based investment accounting and reporting solutions. The company specializes in delivering comprehensive accounting, data, advanced analytics, and highly-configurable reporting for institutional clients, including asset managers, insurance companies, and corporations. Clearwater’s platform automates the aggregation, reconciliation, validation, and reporting of investment data, enabling clients to gain real-time, on-demand insights into their portfolios.
Clearwater Analytics (NYSE:CWAN) is set for growth, backed by its advanced technology and strong customer base. With 80% of its revenue from the U.S., global expansion presents significant opportunities for the company. In that regard, on January 13, 2025, the company announced to acquire Enfusion (NYSE:ENFN) for $1.5 billion to strengthen its investment platform. This deal enhances the company’s position in hedge funds, expanding its addressable market by over $2 billion while increasing its presence in Europe and Asia. Additionally, rising regulatory requirements for investment transparency further boost its value proposition.
On February 20, Piper Sandler analyst Arvind Ramnani upgraded Clearwater Analytics (NYSE:CWAN) from Neutral to Overweight and increased the price target from $28 to $36. While the company’s strong Q4 2024 results exceeded expectations, the analyst’s optimism was primarily driven by Clearwater’s acquisition of Enfusion. This strategic move enhances Clearwater’s capabilities by enabling it to provide clients with a comprehensive, front-to-end data solution. The analyst views the merger as a compelling opportunity to deepen relationships with existing clients and improve success rates in acquiring new ones. Additionally, he believes the company’s initial 2025 targets are conservative, suggesting potential for further upside.
