Confluent
stock jumped 26% as analysts were increasingly confident about the outlook after the software company posted surprisingly strong results and offered an upbeat forecast for the year.
“Shares were up 20% [after hours], which we believe reflect the removal of investor skepticism about conservatism built into guidance, which we have even more confidence in following this print,” Guggenheim analyst Howard Ma wrote in a research note following the disclosure of the results on Wednesday. He increased his price target on
Confluent
to $35 from $26 and maintained his Buy rating on the stock.
Shares were trading at $30.38. The stock has now risen 21% in the last 12 months.
Confluent said late Wednesday that it expects revenue for 2024 to be approximately $950 million. That’s a 22% increase from 2023 and above Wall Street estimates of $940 million.
“Given our solid Q4 performance, we feel confident in achieving our revenue guidance for 2024 and our first breakeven year for both non-GAAP operating margin and free cash flow margin,” Chief Financial Officer Rohan Sivaram said in the earnings release.
The company provides software that companies use to collect data such as sales and customer feedback in real time.
For the fourth quarter, it reported earnings of 9 cents a share on revenue of $213.2 million. Analysts surveyed by FactSet were expecting earnings of 5 cents a share on revenue of $205.3 million. In the same period a year earlier, Confluent posted a loss of 9 cents a share on revenue of $168.7 million.
This was a “strong finish to the year,” said William Blair analyst Jason Ader in a research note.
“The fourth quarter print provided relief for investors after disappointing third quarter results that saw lowered guidance due to macro headwinds and the loss of two large customers,” he said. “…We continue to like the Confluent story for its exceptional product market fit and competitive moat in the large and fast growing data streaming category.”
Write to Angela Palumbo at [email protected]
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