Clearwater Analytics Holdings, Inc. (NYSE: CWAN)

Sector: Technology Industry: Software - Application CIK: 0001866368
Market Cap 5.23 Bn
P/B 2.64
P/E 13.33
P/S 8.17
ROIC (Qtr) 0.01
Div Yield % 0.00
Rev 1y % (Qtr) 77.08
Total Debt (Qtr) 882.85 Mn
Debt/Equity (Qtr) 0.45

About

Clearwater Analytics Holdings, Inc., known by its stock symbol CWAN, operates in the investment accounting and analytics industry. The company's primary business activities revolve around providing a unified technology platform that simplifies investment management accounting and reporting, performance measurement, compliance monitoring, and risk analytics for asset owners and asset managers. This platform is accessible in various countries and regions, including North America, Europe, Asia Pacific, and the Middle East. Clearwater generates revenue...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 60.75M provide 2.58x coverage of short-term debt 23.54M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 91.37M provides exceptional 265.60x coverage of minority interest expenses 344000, showing strong core operations.
  • Robust free cash flow of 81.94M exceeds capital expenditure of 9.42M by 8.70x, indicating strong organic growth funding capability.
  • Tangible assets of 1.01B provide exceptional 58.84x coverage of deferred revenue 17.15M, showing strong service capability backing.
  • Cash position of 60.75M provides exceptional 176.60x coverage of minority interest expenses 344000, indicating strong liquidity.

Bear case

  • Operating cash flow of 91.37M barely covers its investment activities of (989.33M), with a coverage ratio of -0.09, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Investment activities of (989.33M) provide weak support for R&D spending of 180.12M, which is -5.49x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Cash reserves of 60.75M provide limited coverage of acquisition spending of (1.08B), which is -0.06x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • The company's operating cash flow of 91.37M shows concerning coverage of stock compensation expenses of 122.87M, with a 0.74 ratio indicating potential earnings quality issues.
  • Operating cash flow of 91.37M provides minimal -0.20x coverage of tax expenses of (457.43M), suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.03 2.65
EV to Cash from Ops. EV/CFO 66.61 13.37
EV to Debt EV to Debt 6.89 57.69
EV to EBIT EV/EBIT -170.87 19.12
EV to EBITDA EV/EBITDA 81.80 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 74.27 14.69
EV to Market Cap EV to Market Cap 1.16 -92.28
EV to Revenue EV/Rev 9.50 4.60
Price to Book Value [P/B] P/B 2.64 4.26
Price to Earnings [P/E] P/E 13.33 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 2.52
Interest Coverage Int. cover (Qtr) -1.20 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -54.40 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -73.44 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 6,548.32 -263.15
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 120.23 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) -1,410.34 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) -11,742.50 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 18,000.00 123.84
FCF Growth (1y) % FCF 1y % (Qtr) -32.56 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 43.13 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.58
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 0.48 3.75
Current Ratio Curr Ratio (Qtr) 1.97 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.45 0.17
Interest Cover Ratio Int Coverage (Qtr) -1.20 -52.32
Times Interest Earned Times Interest Earned (Qtr) -1.20 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 6.00 -100.06
EBIT Margin % EBIT Margin % (Qtr) -5.56 -164.24
EBT Margin % EBT Margin % (Qtr) -10.18 -116.94
Gross Margin % Gross Margin % (Qtr) 68.50 58.20
Net Profit Margin % Net Margin % (Qtr) 61.30 -121.65