Confluent, Inc. (NASDAQ: CFLT)

Sector: Technology Industry: Software - Infrastructure CIK: 0001699838
P/B 9.05
P/E -33.29
P/S 9.09
Market Cap 10.12 Bn
ROIC (Qtr) -18.01
Div Yield % 0.00
Rev 1y % (Qtr) 19.31
Total Debt (Qtr) 1.11 Bn
Debt/Equity (Qtr) 0.99

About

Confluent, Inc. (CFLT) operates in the data infrastructure industry, providing a complete data streaming platform that enables organizations to stream, connect, process, and govern their data in motion. The company's mission is to set data in motion, empowering organizations to harness the power of real-time data to drive business outcomes. Confluent's main business activities revolve around providing a comprehensive data streaming platform that simplifies and scales the way data is moved across an organization. The company's primary products include...

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Analysis

Pros

  • Healthy cash reserves of 298.54M provide 31.78x coverage of short-term debt 9.39M, demonstrating strong liquidity position and minimal refinancing risk.
  • Tangible assets of 2.71B provide exceptional 5.69x coverage of deferred revenue 475.26M, showing strong service capability backing.
  • Short-term investments of 1.69B provide solid 2.81x coverage of other current liabilities 601.45M, indicating strong liquidity.
  • Tangible assets of 2.71B provide robust 4.50x coverage of other current liabilities 601.45M, indicating strong asset backing.
  • R&D investment of 474.67M represents healthy 1x of deferred revenue 475.26M, indicating strong future innovation pipeline.

Cons

  • Operating cash flow of 57.37M barely covers its investment activities of (157M), with a coverage ratio of -0.37, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (157M) provide weak support for R&D spending of 474.67M, which is -0.33x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 57.37M provides insufficient coverage of deferred revenue obligations of 475.26M, which is 0.12x, raising concerns about future service delivery capabilities.
  • Short-term investments of 1.69B significantly exceed cash reserves of 298.54M, which is 5.67x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • The company's operating cash flow of 57.37M shows concerning coverage of stock compensation expenses of 398.62M, with a 0.14 ratio indicating potential earnings quality issues.

Peer Comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,542.10 Bn 33.76 12.06 60.56 Bn
2 ORCL Oracle Corp 533.93 Bn 34.61 8.75 124.39 Bn
3 PLTR Palantir Technologies Inc. 437.56 Bn 399.47 112.31 0.24 Bn
4 PANW Palo Alto Networks Inc 125.16 Bn 112.03 13.10 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 120.85 Bn -384.67 26.47 0.82 Bn
6 SNPS Synopsys Inc 71.69 Bn 35.89 11.14 15.14 Bn
7 NET Cloudflare, Inc. 67.84 Bn -658.43 33.70 3.50 Bn
8 FTNT Fortinet, Inc. 63.33 Bn 33.80 9.66 1.00 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 3.80 2.56
EV to Cash from Ops. 190.59 38.32
EV to Debt 9.88 -11.37
EV to EBIT -35.55 -12.79
EV to EBITDA -30.86 7.72
EV to Free Cash Flow [EV/FCF] 344.69 24.22
EV to Market Cap 1.08 0.58
EV to Revenue 9.82 -35.00
Price to Book Value [P/B] 9.05 3.74
Price to Earnings [P/E] -33.29 -18.61

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % 0.00 2.69
Dividend per Basic Share 0.00 0.10
FCF Dividend Payout Ratio % 0.00 1.67
Interest Coverage 0.00 -13.15

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % -10.10 -404.11
Cash and Equivalents Growth (1y) % -7.46 226.02
Dividend Growth (1y) % 0.00 -0.27
EBIAT Growth (1y) % 13.39 31.15
EBITDA Growth (1y) % 5.41 49.02
EBIT Growth (1y) % 1.13 25.85
EBT Growth (1y) % 1.13 17.82
EPS Growth (1y) % 18.92 70.69
FCF Growth (1y) % 347.58 295.45
Gross Profit Growth (1y) % 23.43 49.96

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.39 0.68
Cash Payout Ratio 0.00 0.02
Cash Ratio 0.48 1.21
Current Ratio 4.01 2.57
Debt to Equity Ratio 0.99 -0.93
Interest Cover Ratio 0.00 -13.15
Times Interest Earned 0.00 -13.15

Profitability

Metric Value Industry Percentile
EBITDA Margin % -24.70 -544.82
EBIT Margin % -27.63 -197.78
EBT Margin % -27.63 -602.74
Gross Margin % 74.10 52.06
Net Profit Margin % -27.30 -605.52