CWAN
Clearwater Analytics Holdings, Inc.
$24.56
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Overvalued
Trading 27.6% above fair value
You pay
$24.56
Bear
$7.26
Fair
$19.25
Bull
$29.97
Bear
$7.26
-70.4%
18% rev growth, 15% terminal margin
Fair
$19.25
-21.6%
29% rev growth, 20% terminal margin
Bull
$29.97
+22.0%
35% rev growth, 23% terminal margin
Key Value Driver
Revenue growth (29%) × margin expansion to 20%
Terminal Value % of EV
57%
Implied Market Multiple
11.1x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $24.55 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $19.25 per share.
Warnings
Wall Street's average price target is $24.55 (from 13 analysts). Our estimate is 27% below the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep