CWAN
Clearwater Analytics Holdings, Inc.
$24.32
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Overvalued
Trading 25.8% above fair value
You pay
$24.32
Bear
$7.29
Fair
$19.34
Bull
$30.10
Bear
$7.29
-70.0%
18% rev growth, 15% terminal margin
Fair
$19.34
-20.5%
29% rev growth, 20% terminal margin
Bull
$30.10
+23.8%
35% rev growth, 23% terminal margin
Key Value Driver
Revenue growth (29%) × margin expansion to 20%
Terminal Value % of EV
57%
Implied Market Multiple
11.0x
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 $24.96 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $19.34 per share.
Warnings
Wall Street's average price target is $24.96 (from 13 analysts). Our estimate is 28% 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