CLEARWATER ANALYTICS HDS-A (NYSE:CWAN) – A Strong Growth Stock with Technical Breakout Potential

CLEARWATER ANALYTICS HDS-A (NYSE:CWAN) was identified by our screener as a strong growth stock with a favorable technical setup. The company combines solid fundamentals with a promising chart pattern, making it worth a closer look for investors seeking growth opportunities.

Growth and Profitability

• High Growth Rating (9/10): CWAN has demonstrated strong revenue and earnings growth, with revenue increasing by 23.21% over the past year and earnings per share (EPS) growing by 29.73%. Future estimates suggest continued expansion, with expected annual revenue growth of 35.34%.
• Solid Profitability (6/10): The company maintains healthy margins, including a profit margin of 90.13%, outperforming nearly 99% of its software industry peers. Its return on equity (38.45%) and return on assets (33.38%) are also well above average.
• Strong Financial Health (7/10): CWAN has a robust balance sheet, with a current ratio of 5.09 and minimal debt reliance (Debt/Equity of 0.04). Its Altman-Z score of 23.49 indicates low bankruptcy risk.

Technical Setup

• Setup Rating (8/10): Despite a weak overall technical score (1/10), CWAN is forming a consolidation pattern with reduced volatility. A breakout above the resistance zone at $22.44 could signal an upward move.
• Support and Resistance: Key support lies near $21.33, while resistance levels are clustered between $22.44 and $22.83. A decisive move above this range may confirm a bullish continuation.

Valuation Considerations

• CWAN trades at a premium (P/E of 45.83), but its growth prospects may justify the valuation. The PEG ratio suggests the stock is reasonably priced relative to expected earnings growth.

For more details, review the full fundamental analysis of CWAN and the technical analysis report.

Our Strong Growth Stocks with Good Technical Setup screener lists more stocks matching these criteria and is updated daily.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.