Confluent (CFLT): Assessing Whether Shares Remain Undervalued After a Recent 15% Rebound

Confluent (CFLT) stock has seen moderate movement over the past month, with shares rising about 15%. Investors are closely watching how the company manages revenue growth and aims for improved profitability as the software sector continues to experience volatility.

See our latest analysis for Confluent.

After a rocky start to the year, Confluent’s stock has rebounded with a 15% 1-month share price return, signaling a possible shift in sentiment as investors reconsider the company’s growth story. Over the past 12 months, total shareholder return sits modestly in positive territory, suggesting momentum is building despite lingering volatility in the software sector.

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But with shares rebounding and analyst targets suggesting a bit more upside, is Confluent still trading at a discount? Or has the market already priced in all the future growth ahead?

Most Popular Narrative: 9.3% Undervalued

With Confluent's fair value estimate at $25.20, just above its latest close at $22.87, the most popular narrative sees room for further upside. This sets the stage for a closer look at the bold growth assumptions driving sentiment.

Rapid growth in real-time AI and agentic workloads is driving increased demand for enterprise-grade streaming and processing solutions, with Confluent seeing a projected 10x expansion in production AI use cases across hundreds of customers. This is likely to accelerate subscription and platform revenue over the medium to long term as these use cases mature and proliferate.

Read the complete narrative.

What’s behind this compelling valuation? One high-stakes forecast leans on ambitious revenue growth and major profit margin expansion, plus expectations usually reserved for top tech disruptors. Want to know what future numbers must fall into place to justify this price target? Dive in to uncover the story they reveal.

Result: Fair Value of $25.20 (UNDERVALUED)

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

However, continued customer spending optimizations and slower cloud growth could undermine the bullish case for Confluent and temper near-term upside.

Find out about the key risks to this Confluent narrative.

Build Your Own Confluent Narrative

If you have a different perspective or want to dig into Confluent’s fundamentals yourself, you can craft your own scenario and see how the outlook changes in just a few minutes. Do it your way.

A great starting point for your Confluent research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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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