CWAN Should I Buy
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Clearwater Analytics Holdings Inc (CWAN) is not a strong buy at this time for a beginner investor with a long-term strategy. The stock is in the process of being acquired at a fixed price of $24.55 per share, limiting its upside potential. Additionally, the company's financial performance shows declining profitability, and there are no significant positive catalysts to justify immediate investment.
The MACD is negative and expanding, indicating bearish momentum. RSI is at 27.156, suggesting the stock is nearing oversold territory but not providing a clear buy signal. Moving averages are converging, showing no strong trend direction. Key support is at $23.343, and resistance is at $24.065. The stock closed below its pivot level, which is a bearish indicator.
Hedge funds are significantly increasing their positions, with a 495.69% increase in buying activity over the last quarter. The stock has a 12.52% chance to rise in the next month based on historical candlestick patterns.
The company has agreed to be acquired at $24.55 per share, capping its upside potential. Analysts have downgraded the stock to Neutral or Equal Weight, citing the acquisition deal. Financial performance in Q3 2025 shows a significant decline in net income (-384.79% YoY) and EPS (-300% YoY). No recent news or congress trading data is available to suggest additional positive momentum.
In Q3 2025, revenue increased by 77.08% YoY to $205.11M, but net income dropped significantly to -$10.34M (-384.79% YoY). EPS fell to -0.04 (-300% YoY), and gross margin declined to 65.56% (-10.11% YoY). While revenue growth is strong, profitability metrics are deteriorating.
Analysts have downgraded the stock to Neutral or Equal Weight following the acquisition agreement. UBS and Wells Fargo have set a price target of $24.55, reflecting the acquisition price. Previous analyst expectations of $30-$34 per share are no longer relevant due to the fixed acquisition price.
