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Confluent, Inc. 'Best Positioned' to Succeed But Much Work Lies Ahead - Morgan Stanley

Stock Markets Oct 05, 2022 14:30
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By Sam Boughedda

Confluent Inc (NASDAQ:CFLT) shares are up over 1% Wednesday after it hosted its first-ever investor day —the Current 2022 conference and Investor Session.

Following the event, analysts at Cowen said that while there was no financial update, they sensed a positive tone from management.

"Our partner checks were quite constructive, suggesting strong growth momentum despite some modest macro headwinds. We remain bullish on management's vision to become a next-gen platform powering real-time data flows," Cowen explained.

Meanwhile, Credit Suisse analysts, who have an Outperform rating and $65 price target on the stock, said Confluent CEO Jay Kreps announced two key product updates, its Stream Designer and Governance that provide an end-to-end view of data pipelines.

"We view these announcements as further positioning Confluent to become the 'central nervous system' of the modern technology stack by expanding their data-in-motion platform to more addressable users and up-the-stack use cases," they added. "We reiterate our thesis that Confluent is well-positioned to capitalize on enterprise adoption of data-in-motion technology as the leading enterprise-grade Kafka vendor."

Finally, Morgan Stanley analysts, who have an Equal-Weight rating and $42 price target on the stock said that while light on financials, the Investor Day "provided a case for why CFLT is best positioned to succeed in a market that could reach $60B+."

"Much work lies ahead to deliver on the promise but at 8.5x CY23 rev, risk/reward is less daunting. However, it may be too early to get on board high-growth stories," concluded the analysts.

Confluent, Inc. 'Best Positioned' to Succeed But Much Work Lies Ahead - Morgan Stanley
 

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