Oppenheimer’s Favorite Stocks For Next 12 Months: Top 32 Stock Picks

29. Clearwater Analytics Holdings, Inc. (NYSE:CWAN)

Share Price Upside: -1%

Number of Hedge Fund Investors In Q2 2024: 20

Average Analyst Share Price Target: $24.4

Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is a midsized specialty software as a service (SaaS) company that provides accounting analytics and aggregation services to financial professionals in the insurance and investment management industries. The firm also serves the needs of governments, and its business model focusing on accounting means that some of the volatility that SaaS firms suffer from in slowing economies is removed from the hypothesis. At the same time, Clearwater Analytics Holdings, Inc. (NYSE:CWAN) is nevertheless evaluated on its ability to grow revenue and maintain costs. The firm also benefits from recurring revenue more so because businesses are unlikely to switch their financial software providers unless they are forced to do so or if they perceive significant value propositions being available elsewhere. Clearwater Analytics Holdings, Inc. (NYSE:CWAN) also benefits on this front due to its specialty nature, as it benefits from being able to focus on the countless nuances of accounting. Oppenheimer comments that the firm should “demonstrate sustainability over the medium-term because of the underlying value proposition of its SaaS offerings, strong brand recognition and referenceability.”

Wasatch Global Investors mentioned Clearwater Analytics Holdings, Inc. (NYSE:CWAN) in its Q1 2024 investor letter. Here is what the firm said:

“Clearwater Analytics Holdings, Inc. (CWAN) was also a major detractor. The company develops cloud-native software that allows clients to simplify their investment-accounting operations. Although management projected robust revenue growth of about 18% for the 2024 calendar year, analysts had been hoping for even better growth. As a result, the stock sold off. In our experience, Clearwater’s management team tends to underpromise and then overdeliver. As a result, we bought more shares on the stock-price weakness. And we still expect annual revenue growth to exceed 20% for the next several years.”