Shares of Clearwater Analytics climbed 3% on Tuesday after Goldman Sachs upgraded the stock to buy from neutral, citing the company’s robust free cash flow growth and upcoming investor conference.
While the Wall Street bank maintained its $27 price target, the figure implies more than 46% upside from Monday’s close.
Clearwater, based in Boise, Idaho, provides investment portfolio accounting and other business tools.
The stock has struggled this year, tumbling 33% in 2025 amid investor concerns about the quality of assets acquired, including Enfusion, and the pace of business integration.
Goldman analysts led by Gabriela Borges acknowledged these headwinds but argued that the market has already priced in the associated risks.
“If we subtract Enfusion from Clearwater’s enterprise value, the stock now implies that the core business is trading at ~31x [free cash flow], despite consistently growing at over 20% and still having a multi-year runway of share gains ahead,” Borges wrote.
The analyst added that execution risks tied to acquisitions are “more than priced in,” with potential positive catalysts ahead, notably Clearwater’s Analyst Day scheduled for September 3.
Core business strength drives growth outlook
According to Goldman, Clearwater’s free cash flow in its core business is growing at more than 20% annually, supported by a strong competitive position.
The firm expects momentum in the core business to continue driving 20% growth over the next three to five years.
Borges believes Clearwater’s cloud-native solution will remain a strong competitor against both legacy systems and specialized point products.
This positioning, Goldman said, offers the company a “multi-year runway” to capture additional market share.
Goldman also noted that the valuation of Clearwater’s core business looks attractive when excluding the contribution of recently acquired assets.
The analysts believe this supports the case for the stock’s recovery, especially as integration challenges are resolved and investor confidence rebuilds.
Analyst sentiment and market reaction
Clearwater’s investor base appears to share some of Goldman’s optimism. FactSet data shows that every Wall Street analyst covering the company rates it a buy.
The consensus price target stands slightly above $31, implying roughly 70% upside from current levels.
The market responded positively to Goldman’s upgrade, with shares jumping to a 3% gain during the session.
Investors appear encouraged by both the improving fundamentals in the core business and the potential for positive news flow from the upcoming September conference.
Goldman Sachs has been familiar with Clearwater’s trajectory for some time — the investment bank led the company’s initial public offering in September 2021 at $18 per share.
While the stock has since faced notable volatility, Tuesday’s upgrade suggests that some on Wall Street see a path back to growth, provided Clearwater can execute on its strategic goals and maintain its pace of free cash flow expansion.
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