Warburg Pincus LLC, a former 10% owner of Clearwater Analytics Holdings, Inc. (NYSE:CWAN), has sold a significant portion of its holdings in the company. According to a recent SEC filing, Warburg Pincus disposed of 3,103,450 shares of Class A Common Stock at a price of $29.11 per share, totaling approximately $90.3 million. This transaction, dated November 13, 2024, leaves Warburg Pincus with no remaining shares of Class A Common Stock in Clearwater Analytics. The shares were sold to an underwriter, which may offer them in various market transactions.
In other recent news, Clearwater Analytics has announced a secondary public offering of 25 million shares of Class A common stock. The shares are offered by affiliates of Welsh, Carson, Anderson & Stowe, Warburg Pincus LLC, and Permira Advisers LLC, with J.P. Morgan managing the offering. The company will not receive proceeds from this sale. On the earnings front, Clearwater Analytics reported a 22% year-over-year revenue increase and a 34% year-over-year growth in adjusted EBITDA, surpassing DA Davidson's projections. Following these strong results, the company's management revised their 2024 forecasts upwards, increasing the midpoints for revenue and adjusted EBITDA by approximately 1% and 2% respectively. However, despite the positive earnings, DA Davidson downgraded Clearwater Analytics from Buy to Neutral, citing the company's current market valuation. The firm did increase the price target to $35.00, recognizing Clearwater's solid third-quarter results. In addition to these financial updates, Clearwater Analytics announced Subi Sethi as the new Chief Client Officer. These are recent developments and investors can expect to see how these changes impact the company's performance in the coming quarters.
InvestingPro Insights
The recent sale by Warburg Pincus of its significant stake in Clearwater Analytics Holdings, Inc. (NYSE:CWAN) comes at a time when the company's stock has shown strong performance. According to InvestingPro data, CWAN has experienced a robust 59.63% price total return over the past six months, indicating substantial investor interest.
Despite the large sale by a major shareholder, there are several positive indicators for Clearwater Analytics. InvestingPro Tips highlight that the company's net income is expected to grow this year, and analysts predict profitability for the current fiscal year. This optimism is reflected in the stock's performance, with a 29.33% price total return over the last three months.
However, investors should note that CWAN is trading at high valuation multiples across several metrics, including earnings, EBIT, EBITDA, and revenue. The company's P/E ratio stands at a lofty 2,148.43, suggesting a premium valuation that may warrant caution.
For those seeking a more comprehensive analysis, InvestingPro offers 15 additional tips for CWAN, providing a deeper understanding of the company's financial health and market position.
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