Confluent, Inc. (CFLT), a leading data streaming and cloud computing company, experienced a significant 5.98% plunge in its stock price during the pre-market trading session on Thursday. This downward movement was primarily driven by two key factors: disappointing earnings results and valuation concerns raised by analysts.

According to the company's full-year 2024 earnings report, Confluent's earnings per share (EPS) missed analyst expectations by 3.3%, despite reporting revenue in line with estimates. While the company's revenue grew by 24% year-over-year, reaching $963.6 million, the net loss of $345.1 million raised concerns among investors.

Furthermore, analysts at Simply Wall St raised questions about Confluent's valuation, suggesting that the company may be overvalued based on six different valuation benchmarks they assessed. This analysis, combined with the disappointing earnings results, likely contributed to the sharp decline in the stock price as investors reassessed the company's growth prospects and future profitability.