Shareholders will be ecstatic, with their stake up 21% over the past week following Clearwater Analytics Holdings, Inc.'s (NYSE:CWAN) latest third-quarter results. It was a workmanlike result, with revenues of US$116m coming in 2.1% ahead of expectations, and statutory earnings per share of US$0.02, in line with analyst appraisals. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Clearwater Analytics Holdings after the latest results.

See our latest analysis for Clearwater Analytics Holdings

After the latest results, the twelve analysts covering Clearwater Analytics Holdings are now predicting revenues of US$533.3m in 2025. If met, this would reflect a huge 26% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 5,604% to US$0.17. In the lead-up to this report, the analysts had been modelling revenues of US$529.5m and earnings per share (EPS) of US$0.21 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the real cut to new EPS forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 15% to US$30.73, suggesting that these impacts are not expected to weigh on the stock's value in the long term. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Clearwater Analytics Holdings at US$35.00 per share, while the most bearish prices it at US$22.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The period to the end of 2025 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 19% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 12% annually. So although Clearwater Analytics Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Clearwater Analytics Holdings. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Clearwater Analytics Holdings analysts - going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Clearwater Analytics Holdings that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.