Confluent stock surges 25% on strong 2024 guidance; Analysts bullish By Investing.com



© Reuters. Confluent (CFLT) stock jumps 13% on Q4 results and strong 2024 guidance

(Updated – February 8, 2024 6:00 AM EST)

Confluent’s (CFLT) shares surged more than 25% in early New York trading Thursday following the company’s better-than-expected Q4 results and an upbeat guidance.

Earnings per share (EPS) stood at $0.09, surpassing analyst expectations of $0.05. The company’s revenue for the quarter was $213 million, also ahead of the consensus estimate of $205.35 million.

“Confluent closed fiscal year 2023 on a high note, delivering our first $100 million quarter in Confluent Cloud revenue, representing growth of 46% year over year, and growing subscription revenue by 31% year over year,” said Jay Kreps, co-founder and CEO, Confluent.

“Our momentum is driven by our leadership of the data streaming platform category, which has become a requirement to deliver business critical use cases like connected customer experiences, cloud migrations and now real time generative AI.”

For the first quarter, Confluent expects total revenue to be between $211 million and $212 million, closely aligning with the estimate of $211.2 million. The projected adjusted EPS ranges from 0 to 2 cents, short of the consensus estimate of 2.3 cents.

Looking ahead to the full year, the software company anticipates total revenue to be around $950 million, better than the estimated $936.1 million. However, the company’s forecast for adjusted EPS stands at approximately 17 cents, slightly below the estimated 18 cents.

Analysts at Wolfe Research said the move higher is being fueled by “the company’s biggest beat in Cloud revenue.”

This strength has been “largely driven by stronger consumption from digital native customers and guided above consensus expectations,” they explained.

Analysts at Morgan Stanley lifted the price target by $7 to $34 per share as they see “reasons for optimism heading into 2024.”

“Strength in Confluent platform plus sharper sales execution and better consumption from digital natives resulted in a beat in Q4. With Q1 guidance raised and a reiteration of 22% rev growth for ’24, the outlook no longer assumes a 2H acceleration, creating a clearing event to push shares higher.”

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