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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2344
Positioning
Market Dominance
Services
Computer Software
$6.8B
Edward J. Kreps
Confluent, Inc. operates a data streaming platform in the United States and internationally. It offers Confluent Cloud, a managed cloud-native service for connecting and processing data. Confluent Platform, an enterprise-grade self-managed software that connects and processes data in real-time with the foundational platform for data in motion. It also provides Kafka Connect that enables to build connectors to integrate Apache Kafka with other apps and data systems.
Headcount
2.8K
HQ Base
Pending Verification
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = CFLT ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$YALA Yalla Group Ltd | 75 | 89 | 99 | 80 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$GRVY GRAVITY Co., Ltd. | 75 | 82 | 96 | 71 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$ISSC INNOVATIVE SOLUTIONS & SUPPORT INC | 73 | 81 | 88 | 94 | 25.0x | 14.1x | 17.1% | 10.3% | 35.5% | 14.6% | 10.1% | 105.2% | 0.0% | 41.0x | $244M | VS | |
$AER AerCap Holdings N.V. | 72 | 60 | 87 | 84 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$HCSG HEALTHCARE SERVICES GROUP INC | 72 | 74 | 88 | 88 | 7.1x | 6.1x | 28.9% | 20.8% | 20.8% | 9.9% | 9.3% | 8.5% | 0.0% | 1.0x | $1.2B | VS | |
$LQDT LIQUIDITY SERVICES INC | 72 | 90 | 88 | 68 | 24.9x | 14.3x | 14.1% | 8.3% | 45.7% | 8.5% | 6.2% | 28.1% | 0.0% | 0.0x | $736M | VS | |
$TRTNpA Triton International Ltd | 71 | 70 | 89 | 70 | - | 1.7x | 0.0% | - | 97.4% | 58.0% | 37.4% | - | 8.8% | 264.0x | $2.5B | VS | |
$EDU New Oriental Education & Technology Group Inc. | 71 | 83 | 52 | 77 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$NTES NetEase, Inc. | 71 | 88 | 93 | 68 | - | - | - | - | - | - | - | - | - | - | $0 | VS | |
$UTI UNIVERSAL TECHNICAL INSTITUTE INC | 70 | 86 | 86 | 72 | 43.2x | 16.0x | 15.3% | 5.8% | 100.0% | 6.9% | 5.2% | 15.1% | 0.0% | 24.0x | $1.8B | VS | |
$CFLT Confluent, Inc. | 48 | 30 | 32 | 69 | - | - | -24.8% | -9.7% | 74.3% | -34.2% | -26.5% | 27.0% | 0.0% | 94.0x | $6.8B | ||
| SECTOR BENCH | - | - | - | - | - | 23.7x | 11.7x | 5.7% | 2.4% | 64.6% | 4.5% | 2.8% | 8.6% | 0.0% | 0.3x | - | REF |
Confluent, Inc. (CFLT) receives a "Reduce" rating with a composite score of 47.9/100. It ranks #2344 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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Outperforming peers — winners tend to keep winning over 3-12 months
Expensive relative to fundamentals — limited margin of safety
Weak fundamentals — higher risk of value trap
Average volatility — neutral timing signal
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Services sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
No analyst ratings for CFLT.
View All Ratings| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 30 | 17 | +13ALPHA |
| MOMENTUM | 69 | 78 | -9DRAG |
| VALUATION | 32 | 26 | +6ALPHA |
| INVESTMENT | 40 | 68 | -28DRAG |
| STABILITY | 44 | 43 | +1NEUTRAL |
| SHORT INT | 46 | 43 | +3NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC -37.7% vs WACC 9.2% (spread -46.9%)
GM 74% vs sector 65%, OM -34% vs sector 5%
Capital turnover 1.46x, R&D intensity 41.3%
Rev growth 27%, 5yr history
Interest coverage N/A
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
We rate Confluent, Inc. (CFLT) as a Reduce with a composite score of 47.9/100 at a current price of $30.63. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential.
Confluent, Inc. holds a top-quartile position (#0 of 50) within the Services sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 47.9/100 places it at rank #2344 in our full universe.
The near-term outlook is constructive, with revenue growing at 27% and momentum in the 69th percentile confirming positive market sentiment. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy.
Narrow
Very High
Poor
Fair Value
Gross margins of 74% signal strong pricing power.
Positive momentum indicates institutional accumulation.
Stable competitive position in a defensive sector.
Below-average quality raises earnings sustainability concerns.
Vulnerability to macroeconomic shocks and interest rate volatility.
Confluent, Inc. represents a reduce based on multi-factor quantitative performance.
Confluent, Inc. receives a Reduce rating from our analysis, with a composite score of 47.9/100 and 2 out of 5 stars, ranking #2344 out of 7,333 stocks. CFLT's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
CFLT's quality score of 30/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of -24.8% (sector avg: 5.7%), gross margins of 74.3% (sector avg: 64.6%), net margins of -26.5% (sector avg: 2.8%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 32/100, CFLT appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/B ratio of 9.39x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
With an investment score of 40/100, CFLT exhibits moderate growth-oriented spending. Key growth metrics include revenue growth of 27.0% vs. a sector average of 8.6% and a return on assets of -9.7% (sector: 2.4%). The company appears to be balancing growth investments with capital returns, though the pace of investment may not be enough to accelerate top-line growth meaningfully.
CFLT demonstrates moderate momentum with a score of 69/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at 27.0% year-over-year, while a beta of 1.51 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
CFLT's stability score of 44/100 signals elevated volatility and/or leverage concerns. Key stability metrics include a beta of 1.51 and a debt-to-equity ratio of 94.00x (sector avg: 0.3x). Investors should be prepared for wider-than-average price swings and consider position sizing accordingly to manage portfolio risk.
The short interest score of 46/100 for CFLT suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include high market sensitivity (beta: 1.51), elevated leverage (D/E: 94.00x). With a $6.8B market cap (mid-cap), Confluent, Inc. may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
Confluent, Inc. is a mid-cap company in the Services sector, ranked #0 of 50 in its sector (100th percentile) and #2344 of 7,333 overall (68th percentile). Key comparisons include ROE of -24.8% trailing the 5.7% sector median and operating margins of -34.2% below the 4.5% sector average. This top-quartile standing reflects exceptional competitive strength relative to Services peers.
While CFLT currently exhibits a REDUCE profile, superior opportunities exist within the SERVICES sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Quality (30) would have the largest impact on the composite score.
ROE 532% BELOW SECTOR MEDIAN
Gross Margin 15% ABOVE SECTOR MEDIAN (FAVORABLE)
Op. Margin 860% BELOW SECTOR MEDIAN
Above 50MA
37.18%
Net New Highs
+51081
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Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.