Clearwater Analytics is Monday's selection for IBD 50 Stocks To Watch as shares have cleared an early entry at the 50-day moving average.
Clearwater gapped up after reporting fourth-quarter earnings on Feb. 20. But the stock also offers a proper buy point at 35.71 in a long cup base.
In addition to that strong action, consider that the stock is in an early-stage base that can net higher gains. Further, its buy point is also its all-time high.
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Clearwater Analytics provides a software platform enabled with artificial intelligence that supports big investment firms, insurance companies, hedge funds and the like. It looks to meet customer needs for portfolio planning, performance reporting or just aggregating data via its automation, filtering and other analytic tools.
As of Feb. 19, the platform's data services addressed more than $8.8 trillion in assets.
The finance software provider recently ventured into alternative investments and announced plans to acquire software-as-a-service provider Enfusion in January. Enfusion lists hedge funds and the investment management industry as its clients.
Further, Clearwater Analytics focuses on private markets. Alternative investments are seen hitting $24.5 trillion by 2028, according to Preqin.
The company also launched Clearwater-GPT, using a generative pretrained transformer to offer interactive features for clients in July 2023.
Clearwater Analytics ranks first in the 24-member Computer Software-Financial group, according to IBD Stock Checkup. The group ranks 61st out of 197 followed by Investor's Business Daily.
Clearwater Analytics Stock: Strong Ratings
As an initial public offering, shares listed on the New York Stock Exchange at 18 on Sept. 24, 2021. It has a best-possible Composite Rating and EPS Rating of 99 while the Relative Strength Rating of 91 also shows that Clearwater Analytics stock has outperformed the vast majority of stocks in the IBD database.
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Growth in sales and earnings has been steady over the past eight quarters. During the fourth quarter, sales climbed 28% to $126.5 million while earnings per share of 13 cents were 30% higher than the prior year.
Its sales outlook for the first quarter of $125 million is in line with analyst estimates. FactSet consensus also estimates a 24% growth in earnings of 12 cents per share.
Fund ownership is a strong point for Clearwater Analytics. Funds own 68% of outstanding shares, with more adding the stock to their portfolios over the last seven quarters.
Funds also have been busy adding the stock over the past 13 weeks as well, giving it an Accumulation/Distribution Rating of A-. In the IBD mutual fund index, the Invesco Discovery Fund (OPOCX) and the Lord Abbett Developing Growth Fund (LAGWX) hold shares of Clearwater Analytics.
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