Clearwater Analytics (CWAN): Exploring Valuation After New J.P. Morgan Partnership Expands Hedge Fund Solutions

Clearwater Analytics (CWAN) just revealed a new partnership with J.P. Morgan Asset Management, linking its Enfusion platform to the Morgan Money trading system. This integration allows hedge funds to manage cash, investments, and liquidity in a streamlined and automated workflow.

See our latest analysis for Clearwater Analytics Holdings.

This tie-up arrives shortly after Clearwater Analytics announced its upcoming quarterly results, keeping the spotlight firmly on the company. Despite these strategic moves, the share price return has lost momentum in 2024, dropping 36.2% year-to-date. The 1-year total shareholder return of -35.6% hints at broader market caution. Over the longer run, however, the company has still delivered a positive 2.2% total return over three years, even as near-term volatility weighs on sentiment.

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The stock now trades at a steep discount to analyst targets. However, with slowing net income and recent volatility, investors must ask if Clearwater Analytics is undervalued or if the market has already priced in future growth.

Most Popular Narrative: 43.1% Undervalued

Clearwater Analytics’ current share price of $17.37 is far below the narrative’s estimated fair value of $30.55. This creates a significant valuation gap and highlights the assumptions that drive the most popular perspective among analysts.

The creation of an end-to-end platform from these integrations is expected to unlock substantial upsell and cross-sell potential among existing customers, which could increase wallet share. Bullish analysts anticipate that successful integration and platform development will drive higher client win rates and support long-term revenue growth.

Read the complete narrative.

Want to know what’s fueling this double-digit upside projection? What underlying growth levers are analysts betting on, and how do future revenue and profit margins play into the calculus? There is a set of financial projections behind this target. Find out exactly what numbers the narrative is counting on to justify that higher price.

Result: Fair Value of $30.55 (UNDERVALUED)

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

However, ongoing integration challenges and uncertain client adoption of new offerings could put pressure on Clearwater’s revenue growth and earnings, which may challenge the bullish outlook.

Find out about the key risks to this Clearwater Analytics Holdings narrative.

Build Your Own Clearwater Analytics Holdings Narrative

If you’d rather draw your own conclusions or take a more hands-on approach, it’s quick and easy to build your own view of Clearwater’s story. Do it your way

A great starting point for your Clearwater Analytics Holdings research is our analysis highlighting 5 key rewards and 4 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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