Clarivate (NYSE:CLVT) Valuation: Weighing the Shift to AI and Recurring Revenue

Clarivate (NYSE:CLVT) recently made waves at the Goldman Sachs Communicopia + Technology Conference 2025 by highlighting its transition toward recurring subscription revenue and announcing a bold push into AI-enabled offerings. The company’s leadership emphasized a renewed focus on artificial intelligence, including the rollout of GenAI-integrated products and a concrete plan to phase out transactional sales in its Academia & Government and Life Sciences divisions by 2026. For investors, these forward-looking moves indicate that Clarivate is taking tangible steps to evolve its business model in a rapidly changing information services market. The market’s response has been mixed. Over the past year, Clarivate’s stock has lost 40% of its value, with this trend continuing into 2025 as the shares remain down year to date. Despite the sharp decline, recent announcements and management’s confidence in AI integration have started to draw new attention, even as the company’s recovery momentum appears limited in the near term. After such a tough year and the company’s ambitious roadmap, is this an early entry point for investors who believe in Clarivate’s turnaround story, or are the markets still pricing in more pain ahead?

Most Popular Narrative: 21% Undervalued

According to the most widely followed narrative, Clarivate is presently undervalued by 21% compared to its estimated fair value. This outlook is based on analysts’ expectations for future growth in revenue, margins, and recurring subscription income as the company pivots toward AI-powered solutions.

"Rapid expansion and adoption of AI-driven product innovation across all segments (including new AI-powered analytics in Web of Science, Derwent, and Cortellis) enhances product differentiation and workflow integration, driving higher pricing, customer retention, and potentially expanding gross margins."

Curious about what’s fueling this bullish projection? The narrative relies on a rigorous set of data-driven assumptions that could redefine how investors see Clarivate. Bold profit margin improvements, unexpected growth levers, and a price multiple that breaks norms for the sector are all factors. Wondering what numbers lie behind this striking valuation? Keep reading to uncover the key ingredients of this forward-looking story.

Result: Fair Value of $5.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent funding cuts in higher education and intensifying competition from free research platforms could quickly undermine Clarivate’s bullish turnaround outlook.

Find out about the key risks to this Clarivate narrative.

Another View: Discounted Cash Flow Perspective

Taking a different approach, our DCF model also points to Clarivate being undervalued based on projected future cash flows. However, as with any model, results depend on key assumptions. Is this a clearer signal for potential buyers?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Clarivate for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Clarivate Narrative

If you find yourself questioning these conclusions or enjoy digging into the numbers firsthand, you can build your own valuation in just minutes by using Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Clarivate.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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