Wells Fargo Believes Confluent Has Room For Meaningful Upside Given Vast Event-Streaming Opportunity

Wells Fargo analyst Michael Turrin reiterated an Overweight and $40 price target on Confluent, Inc CFLT.
He hosted investor meetings with Confluent management and became more optimistic about the company's positioning in the current environment.
Despite fears of a nearer-term slowdown from CFLT's consumption-based model, the management stressed the difference between operational and analytical workloads, pointing to (1) the mission-critical nature of data streaming within end-user tech stacks, (2) ongoing bookings success over the last few quarters, and (3) that not all consumption models are the same.
He senses that CFLT can continue to execute through the noise, only seeing minimal impacts from the broader backdrop.
The analyst reports no change to his positive thesis and sees a vast event-streaming opportunity ahead, and thinks recent investments can help fuel a rapid adoption cycle and long 'stream' of excessive growth for CFLT.
He derived the price target using a higher valuation than other companies in software.
Still, with room for meaningful upside, given the vast, open-ended nature of the event-streaming opportunity, unique competitive positioning, and Confluent's differentiated tech platform, he thinks it presents significant product-led optionality.
Price Action: CFLT shares traded lower by 1.30% at $26.88 on the last check Tuesday.

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