The company’s shares have gained more than 47% since the beginning of the year, with a cumulative increase of 120% since October, thanks to strong demand for its real-time data streaming services.
This tech stock expects earnings to grow 325% in 2024 and it’s not Nvidia, Intel, Microsoft or even Advanced Micro Devices, which recently launched its own AI chip.
After a 2023 year characterized by solid profits in the tech sector, experts are optimistic about 2024, predicting an increase of 17% in earnings per share (EPS) and 9 .1% in revenue, according to FactSet estimates. In a world where technology and artificial intelligence are the driving forces, one particular stock has been standing out for its remarkable performance and promising growth prospects. Since the start of this year, the shares of this company, which is listed on the Nasdaq, have risen by over 47%.
Here’s what stock it is and why it is destined to dominate the financial markets in the coming months.
Why this tech stock expects earnings to grow 325% in 2024
We’re talking about Confluent , a software company based in Mountain View, California, that is at the forefront of real-time data management and advanced analytics. Its mission is to help companies make faster and more effective decisions based on incoming data, acting as a true “central nervous system” for monitoring data in real-time.
Confluent expects 325% earnings growth in 2024 due to its prime position in the real-time data sector. The recent surge in data streaming comes after Confluent ended 2023 with stock price losses for five of the final six months of the year. However, concerns faded when Confluent reported a 26% sales increase to $213.2 million in the fourth quarter.
The company expects its 2024 revenue to reach $950 million, an increase of 22% over 2023. Additionally, it expects earnings to increase 325% to 17 cents from 4 cents in 2023, in line with current forecasts of Wall Street.
Strong customer demand for AI applications, such as chatbots and coding platforms, continues to support Confluent’s growth as it positions itself as a key infrastructure for such applications.
Flink’s integration for streaming data processing allows organizations to act on data as it arrives, rather than waiting for batch processing at the end of the day. The practical applications of this real-time data are diverse and include areas such as logistics, pricing, and planning.
Analyst Forecasts
Recently, experts at Stifel, a brokerage and investment banking firm, assigned Confluent stock a “buy” rating and a price target of $40, which implies an upside of 18% from the current levels.
Stifel’s analysis highlights Confluent’s significant role in modernizing data architectures, based on widely used open-source software, Kafka and Flink. Additionally, the company highlighted Confluent’s presence in more than 75% of Fortune 500 companies and its adoption by approximately 150,000 organizations globally.
Q4 financial results
In fourth quarter, total revenue increased 26% to $213.2 million. Subscription revenue of $202.8 million grew 31%, led by Confluent Cloud revenue (47% of total) which increased 46% to $100 million, exceeding guidance of $97.8 million. Gross margin increased 450 basis points year-over-year to a record 77.5%, while subscription revenue gross margin increased 240 basis points to a record 81.1%. Operating profit was 5.3%.
Confluent operates in a rapidly expanding market. The data streaming category is growing in both scale and use, as more organizations recognize the benefits of real-time analysis of their data.
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The information and considerations in this article should not be used as the sole or primary basis for making investment decisions. The reader retains full freedom in his own investment choices and full responsibility in making them, since he alone knows his risk propensity and his time horizon. The information contained in the article is provided for informational purposes only and its disclosure does not constitute and should not be considered an offer or solicitation to the public for savings.|
Original article published on Money.it Italy 2024-03-04 16:37:10. Original title: Questo titolo tech prevede utili in crescita del 325% nel 2024
