In a recent transaction reported by Clearwater Analytics Holdings, Inc. (NYSE:CWAN), entities associated with Welsh, Carson, Anderson & Stowe (WCAS) sold shares valued at approximately $452 million. The sale involved 15,539,445 shares of Class C Common Stock at a price of $29.11 per share. Following this transaction, the WCAS entities have no remaining shares of this class. The move marks a significant divestment by WCAS, a major shareholder in the company.
In other recent news, Clearwater Analytics Holdings, Inc. announced a secondary public offering of 25 million shares of Class A common stock, with the offering managed by the underwriter, J.P. Morgan. The shares are offered by affiliates of Welsh, Carson, Anderson & Stowe, Warburg Pincus LLC, and Permira Advisers LLC, known as the Selling Stockholders, and Clearwater Analytics will not receive proceeds from this stock sale. In addition, Clearwater Analytics reported a 22% year-over-year revenue increase and a 34% year-over-year growth in adjusted EBITDA in its third-quarter results, surpassing DA Davidson's projections. Following these positive earnings, the company's management revised their 2024 forecasts upwards, increasing the midpoints for revenue and adjusted EBITDA by approximately 1% and 2%, respectively. However, DA Davidson downgraded Clearwater Analytics from Buy to Neutral, despite increasing the price target to $35.00, citing the company's current market valuation. The firm acknowledged Clearwater's solid third-quarter results and the management's confidence in future performance. Clearwater Analytics also announced Subi Sethi as the new Chief Client Officer during their earnings call. These are recent developments, which investors can expect to impact the company's performance in the coming quarters.
InvestingPro Insights
The recent large-scale divestment by WCAS entities from Clearwater Analytics Holdings, Inc. (NYSE:CWAN) comes at a time when the company's stock has shown remarkable performance. According to InvestingPro data, CWAN has demonstrated a strong return over the last month, with a 17.34% price total return, and an even more impressive 64.13% return over the past six months. This robust performance aligns with an InvestingPro Tip indicating that CWAN has delivered a high return over the last year.
Despite the significant share sale, CWAN's market capitalization remains substantial at $7.36 billion. The company's financial health appears solid, with an InvestingPro Tip noting that liquid assets exceed short-term obligations, suggesting a strong balance sheet position. Additionally, CWAN operates with a moderate level of debt, which may provide financial flexibility.
It's worth noting that while CWAN is trading at high valuation multiples across various metrics, including EBIT, EBITDA, and revenue, the company has shown strong growth. Revenue for the last twelve months as of Q3 2024 stood at $424.36 million, with a notable revenue growth of 20.61% over the same period.
For investors seeking a more comprehensive analysis, InvestingPro offers 16 additional tips for CWAN, providing deeper insights into the company's financial position and market performance.
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