Key Takeaways:
- GenAI Leadership: Company deployed 800+ AI agents managing $10 trillion in assets, driving 82% gross margins.
- Price Projection: Based on current execution, CWAN stock could reach $33 by December 2027.
- Potential Gains: This target implies a total return of 40% from the current price of $23.47.
- Annual Return: Investors could see roughly 20% growth over the next 1.9 years.
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
Clearwater Analytics (CWAN) delivered a strong third quarter in 2025, with 77% revenue growth and raised full-year guidance across all metrics.
The company now expects revenue of $730-731 million for 2025, representing 62% year-over-year growth.
CEO Sandeep Sahai highlighted exceptional EBITDA performance, reaching $70.7 million in Q3 at a 34.5% margin. This marked a significant improvement from 32.1% in Q2, despite the integration of lower-margin businesses such as Enfusion.
- The company’s gross margin hit 78.5%, reaching 2027 targets two years ahead of schedule.
- For steady-state core Clearwater clients, gross margins reached 82%, driven by the aggressive deployment of generative AI.
- Cross-selling momentum accelerated with 70% booking growth in core modules, including LPx (alternatives accounting), MLx (mortgage and private credit), and risk management solutions.
- The company signed two seven-figure risk deals in recent weeks alone.
- Asset management became the largest booking vertical year-to-date for the first time, reflecting the company’s expanded capabilities following acquisitions of Enfusion, Beacon, and Bistro.
Despite strong fundamentals and market-leading technology, Clearwater trades at $23.47, offering upside for investors who recognize the company’s position in critical investment management infrastructure.
See analysts’ full growth forecasts and estimates for CWAN stock (It’s free) >>>
What the Model Says for Clearwater Analytics Stock
We analyzed Clearwater through its transformation into a comprehensive front-to-back investment management platform with unmatched generative AI capabilities.
The company benefits from multiple demand drivers. Growing complexity in alternative assets, regulatory requirements, and global portfolio management creates structural demand for next-generation technology solutions.
Clearwater’s $23 billion total addressable market spans insurance, asset management, hedge funds, and asset owners.
The company is positioned to capture share through superior technology and platform consolidation.
The generative AI advantage provides a multi-year competitive moat.
- With 800+ AI agents deployed across its platform, Clearwater demonstrates 90% reductions in manual reconciliation, 80% faster regulatory reporting, and 50% faster financial close cycles for clients.
- Management expects the commercial model optimization for Enfusion to drive meaningful revenue growth in 2026, while cross-selling risk, alternatives, and front-office capabilities across the combined customer base provides additional upside.
Using a forecast of 35.2% annual revenue growth and 25.6% operating margins, our model projects the stock will rise to $33 within 1.9 years. This assumes a 29.5x price-to-earnings multiple.
That represents compression from Clearwater’s historical P/E averages of 37.6x (one year) and 56.1x (three and five years).
The lower multiple acknowledges near-term integration complexity and the time needed to fully realize cross-selling opportunities across the expanded platform. As the company demonstrates sustained growth acceleration and margin expansion, the multiple should re-rate higher.
Our Valuation Assumptions
Estimate a company’s fair value instantly (Free with TIKR) >>>
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for CWAN stock:
1. Revenue Growth: 35.2%
Clearwater’s growth centers on expanding a comprehensive investment management platform across multiple verticals.
Core Clearwater grew approximately 21% year-to-date, demonstrating resilient organic growth.
Enfusion is expected to deliver 12% growth in 2025, with acceleration anticipated as commercial model changes take effect in 2026.
Cross-selling momentum provides significant upside. Management reported 70% growth in bookings for core cross-sell modules.
The company is just beginning to sell its main products like accounting, portfolio management, and risk solutions across the combined customer base.
Asset management becoming the largest booking vertical signals successful execution on the expanded TAM strategy. International expansion continues with wins across Europe, Asia, and Latin America.
2. Operating margins: 25.6%
Clearwater expanded adjusted EBITDA margins to 34.5% in Q3, up 240 basis points sequentially despite integrating lower-margin businesses.
This performance reflects operational efficiency through the adoption of generative AI and disciplined expense management.
The company achieved 82% gross margins for steady-state core clients, demonstrating the potential for margin expansion as newer businesses mature.
Management sees continued opportunities through automation, technology improvements, and the leverage inherent in the single-instance, multi-tenant architecture.
3. Exit P/E Multiple: 29.5x
The market values Clearwater at 36.2x earnings currently. We assume the P/E will compress to 29.5x over our forecast period.
Near-term uncertainty from integrating multiple acquisitions and proving out cross-selling execution weighs on the multiple.
As Clearwater demonstrates consistent growth acceleration from its expanded platform and maintains good margins, the company should command a premium multiple.
The generative AI leadership position, comprehensive product suite, and strong retention metrics (98% gross revenue retention for 26 of the last 27 quarters) support valuation expansion over time.
Build your own Valuation Model to value any stock (It’s free!) >>>
What Happens If Things Go Better or Worse?
SaaS companies face execution risk in acquisitions and technology transitions. Here’s how Clearwater stock might perform under different scenarios through December 2029:
- Low Case: If revenue growth slows to 22.2% and net income margins compress to 21.8%, investors still see a 44% total return (10% annually).
- Mid Case: With 24.6% growth and 23.7% margins, we expect a total return of 100% (20% annually).
- High Case: If cross-selling acceleration drives 27% revenue growth while Clearwater maintains 25.3% margins, returns could hit 167% total (29% annually).
See what analysts think about CWAN stock right now (Free with TIKR) >>>
The range reflects execution on integrating acquired businesses, successful cross-selling of the expanded platform, and maintaining generative AI leadership as competitors invest to catch up.
In the bear case, integration challenges slow growth or margin expansion.
In the bull case, cross-selling exceeds expectations, the Enfusion commercial model drives faster growth, and generative AI creates even wider competitive separation.
How Much Upside Does Clearwater Analytics Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
From there, TIKR calculates the potential share price and total returns under Bull, Base, and Bear scenarios so you can quickly see whether a stock looks undervalued or overvalued.
See a stock’s true value in under 60 seconds (Free with TIKR) >>>
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
