Should You Buy Clearwater Analytics Holdings Inc (CWAN) Today? Analysis, Price Targets, and 2026 Outlook.
Conclusion
Hold
Latest Price
24.130
1 Day change
52 Week Range
32.000
Analysis Updated At
2026/01/28
Not a good long-term buy right now. CWAN is in a take-private deal at $24.55 cash, while the stock is ~$24.13, leaving limited upside (~1–2%) and capping long-term compounding potential because shareholders will likely be cashed out. For a beginner long-term investor with $50k–$100k, this is better treated as a short-term merger-arbitrage situation rather than a long-term investment. If you already own it, holding for deal close makes more sense than initiating a new long-term position today.
Technical Analysis
Price is trading just below the pivot (Pivot ~24.232) and sitting right on/near first support (S1 ~24.123), indicating a tight range around the deal level. Trend signals are mixed: moving averages are bullish (SMA_5 > SMA_20 > SMA_200), but momentum is weakening with a negative and expanding MACD histogram (-0.135). RSI(6) ~44.6 is neutral-to-soft, suggesting no strong buy momentum. Near-term levels: resistance at ~24.341 (R1) and ~24.408 (R2); support at ~24.123 (S1) then ~24.056 (S2). Overall, this looks more like deal-anchored trading than a breakout trend setup.
Options Data
Bullish
Open Interest Put-Call Ratio
Bullish
Option Volume Put-Call Ratio
Options positioning is notably call-heavy (OI put/call 0.15; volume put/call 0.15), which is bullish/optimistic and consistent with traders positioning for deal completion or a small bump. Activity is elevated (today’s volume vs 30-day avg ~335%), and implied volatility is very high (30D IV ~68.6; IV percentile ~95.6), reflecting event-driven uncertainty around the transaction timeline/terms rather than normal fundamentals. Sentiment from options markets: bullish skew, but largely event-driven.
Technical Summary
Sell
4
Buy
7
Positive Catalysts
1) Definitive acquisition agreement at $24.55/share in cash provides a clear price anchor and potential small upside from ~$24.13 if/when the deal closes. 2) Hedge funds are reported as buying aggressively (buying amount +495.69% last quarter), consistent with merger-arb participation. 3) Potential (but not base-case) upside if a higher bid emerges or terms improve (some pre-deal commentary suggested higher valuation potential).
Neutral/Negative Catalysts
1) Upside is capped by the $24.55 cash deal price, limiting return potential for a new buyer (roughly ~1–2% gross spread from current price). 2) Deal risk remains (regulatory/timing/termination risk); the very high IV reflects this uncertainty. 3) Insider selling has increased sharply (+600.64% over the last month), which is a negative signal for initiating a new position. 4) Ongoing shareholder-law-firm investigations/newsflow can create headline risk and short-term noise. 5) Momentum is weakening (negative MACD expansion), reducing attractiveness for a momentum-driven entry.
Financial Performance
Latest reported quarter: 2025/Q3. Revenue grew strongly to $205.11M (+77.08% YoY), indicating strong top-line expansion (likely influenced by acquisitions/scale). However, profitability deteriorated: net income fell to -$10.34M (down -384.79% YoY) and EPS to -$0.04 (down -300% YoY). Gross margin declined to 65.56% (-10.11% YoY). In short: strong growth, but worsening profitability and margin compression in the latest quarter.
Growth
Profitability
Efficiency
Analyst Ratings and Price Target Trends
Recent analyst trend is decisively toward neutralization around the deal price. UBS (2026-01-26) downgraded to Neutral with a $24.55 PT (from $30) explicitly due to the take-private agreement; Wells Fargo (2026-01-08) similarly downgraded to Equal Weight with a $24.55 PT (from $27) and views completion as highly likely. Earlier notes (late 2025) were more constructive with $26–$35 targets, but those are now largely irrelevant because the transaction caps upside. Wall Street ‘pros’ view: deal completion likely and provides certainty. ‘Cons’ view: limited upside from current levels and the risk/reward is no longer compelling for new long-term buyers.
Influential/political trading: No recent congress trading data available, and no politician/influential figure trades were provided in the data.
Wall Street analysts forecast CWAN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CWAN is 27.83 USD with a low forecast of 24.55 USD and a high forecast of 36 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
10 Analyst Rating
Wall Street analysts forecast CWAN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for CWAN is 27.83 USD with a low forecast of 24.55 USD and a high forecast of 36 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Buy
5 Hold
0 Sell
Moderate Buy
Current: 24.130
Low
24.55
Averages
27.83
High
36
Current: 24.130
Low
24.55
Averages
27.83
High
36
UBS
Buy -> Neutral
downgrade
$30
AI Analysis
2026-01-26
New
Reason
UBS
Price Target
$30
AI Analysis
2026-01-26
New
downgrade
Buy -> Neutral
Reason
UBS downgraded Clearwater Analytics to Neutral from Buy with a price target of $24.55, down from $30, after the company reached an agreement to be acquired by an investor group led by Permira and Warburg Pincus for $24.55 per share in cash.
Wells Fargo
Michael Turrin
Overweight -> Equal Weight
downgrade
$27
2026-01-08
Reason
Wells Fargo
Michael Turrin
Price Target
$27
2026-01-08
downgrade
Overweight -> Equal Weight
Reason
Wells Fargo analyst Michael Turrin downgraded Clearwater Analytics to Equal Weight from Overweight with a price target of $24.55, down from $27, following the company's agreement to be taken private at $24.55 per share by a Premira and Warburg Pincus led investor group. Wells views deal completion as highly likely.
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