Healthy Upside Potential: Confluent Inc. (CFLT)

Confluent Inc. (NASDAQ: CFLT) stock fell -3.94% on Friday to $32.18 against a previous-day closing price of $33.50. With 7.18 million shares changed hands, the volume of the stock remained heavier than its average volume of 4.03 million shares. During the session, the Software – Infrastructure company that operates in wider Technology sector, reached to the highest price of $33.66 whereas the lowest price it dropped to was $31.87. The 52-week range on CFLT shows that it touched its highest point at $41.22 and its lowest point at $16.60 during that stretch. It currently has a 1-year price target of $39.63. Beta for the stock currently stands at 0.99.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of CFLT was down-trending over the past week, with a drop of -0.37%, but this was down by -2.04% over a month. Three-month performance dropped to -6.70% while six-month performance rose 40.28%. The stock gained 17.32% in the past year, while it has gained 44.69% so far this year. A look at the trailing 12-month EPS for CFLT yields -1.65 with Next year EPS estimates of 0.20. For the next quarter, that number is -0.00. This implies an EPS growth rate of -28.10% for this year and 600.00% for next year.

Float and Shares Shorts:

At present, 297.83 million CFLT shares are outstanding with a float of 200.94 million shares on hand for trading. On Aug 30, 2023, short shares totaled 21.55 million, which was 7.13% higher than short shares on Jul 30, 2023. In addition to Mr. Edward Kreps as the firm’s Co-Founder, Chairman & CEO, Ms. Neha Narkhede serves as its Co-Founder & Director.

Institutional Ownership:

Through their ownership of 79.90% of CFLT’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 48.88% of CFLT, in contrast to 36.53% held by mutual funds. Shares owned by individuals account for 12.25%. As the largest shareholder in CFLT with 7.70% of the stake, Altimeter Capital Management LP holds 16,305,943 shares worth 16,305,943. A second-largest stockholder of CFLT, The Vanguard Group, Inc., holds 16,153,557 shares, controlling over 7.62% of the firm’s shares. Fidelity Management & Research Co is the third largest shareholder in CFLT, holding 14,807,681 shares or 6.99% stake. With a 2.70% stake in CFLT, the American Funds Small Cap World Fu is the largest stakeholder. A total of 5,710,121 shares are owned by the mutual fund manager. The Vanguard Total Stock Market ETF, which owns about 2.36% of CFLT stock, is the second-largest Mutual Fund holder. It holds 5,004,409 shares valued at 165.6 million. Vanguard Small Cap Index Fund holds 1.96% of the stake in CFLT, owning 4,155,855 shares worth 137.52 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Jun 29, 2023, CFLT reported revenue of $139.41M and operating income of -$117.31M. The EBITDA in the recently reported quarter was -$115.50M and diluted EPS was -$0.42.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for CFLT since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With CFLT analysts setting a high price target of $45.00 and a low target of $30.00, the average target price over the next 12 months is $39.41. Based on these targets, CFLT could surge 39.84% to reach the target high and fall by -6.77% to reach the target low. Reaching the average price target will result in a growth of 22.47% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Summary of Insider Activity:

Insiders traded CFLT stock several times over the past three months with 4 Buys and 11 Sells. In these transactions, 863,133 shares were bought while 891,349 shares were sold. The number of buy transactions has increased to 136 while that of sell transactions has risen to 153 over the past year. The total number of shares bought during that period was 41,559,220 while 42,031,042 shares were sold.

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