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On December 8, 2025 IBM announced an agreement to acquire Confluent for $31.00 per share in cash, valuing the transaction at roughly $11 billion; the deal targets a mid-2026 close. On January 9, 2026 Confluent expanded regional go-to-market reach by adding a managed-service partnership with sccc by stc in Saudi Arabia to extend Confluent Cloud distribution and local support.
Technical Analysis
ADX at 37.33 signals a strong underlying trend; directional indicators show DI+ recovering in a dip & reversal while DI- decreases, which together point to bullish directional pressure that supports near-term upside should acquisition momentum continue.
MACD sits below its signal line (MACD 0.19 vs signal 0.25) and the MACD reading has been decreasing, indicating recent bearish momentum within the broader trend; momentum confirmation remains required before more sustained upside materializes.
MRO reads -24.82 and continues decreasing; the negative oscillator indicates price sits below the model target and implies potential for price to move higher toward that target over time.
RSI at 67.89 with a dip & reversal indicates renewed buying pressure after a short pullback; combined with short-term EMAs and moving averages trading above longer-term averages, price structure favors continued consolidation with a bullish bias.
Price vs averages: the close at $30.75 trades above the 12-day EMA ($30.66), 20-day average ($30.65), 50-day average ($30.43) and well above the 200-day average ($24.43), supporting a constructive short-term technical posture. Narrow Bollinger bands around ~$30.6–$30.8 imply low volatility compression that often precedes directional expansion.
Fundamental Analysis
Revenue expanded 23.93% year-over-year to $314.8M for the period ending 2025-12-31; subscription revenue constituted the bulk of sales growth. Non-GAAP EPS came in at $0.12 versus an estimate of $0.10, producing a +20% EPS surprise and signaling incremental margin improvement on recent quarters.
Profitability and margins remain a constraint: operating (EBIT) margin equals -31.50% and EBIT totals -$99,174,000, though the operating margin improved QoQ by 12.88% and deteriorated YoY by 22.21%. The EBIT margin sits above the industry peer low of -44.038% but well below the industry peer mean (46.808%) and median (60.268%), indicating the company remains loss-making on an operating basis relative to typical industry profitability metrics.
Cash and liquidity present strength: cash and short-term investments total $2,053,972,000, the current ratio equals 3.83 and the cash ratio is 3.02, providing runway to fund operations and execute integration activities tied to the announced acquisition. Free cash flow yield measures roughly 0.35% and free cash growth shows YoY weakness, underscoring limited cash return to investors despite positive absolute cash balances.
Capital structure: total debt stands at $1,105,371,000 with net debt of $748,778,000 and debt-to-equity of 0.95. Interest coverage reads negative due to operating losses, reflecting that earnings do not cover interest expense at present.
Valuation context: PE sits at ~236.16 with forward PE near 154.38; price-to-book reads 8.63 and price-to-sales at 32.06. WMDST values the stock as over-valued, driven by stretched multiples relative to fundamentals and modest near-term free-cash yields despite robust revenue growth and ample liquidity. The transaction consideration announced by IBM at $31 per share implies a material premium to pre-deal public market levels and alters the standalone public valuation picture.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2025-12-31 |
| REPORT DATE: | 2026-02-11 |
| NEXT REPORT DATE: | 2026-05-13 |
| CASH FLOW | Begin Period Cash Flow | $ 298.5 M |
| Operating Cash Flow | $ 42.1 M | |
| Capital Expenditures | $ -6.59 M | |
| Change In Working Capital | $ 230.0 K | |
| Dividends Paid | — | |
| Cash Flow Delta | $ 48.7 M | |
| End Period Cash Flow | $ 347.2 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 314.8 M | |
| Forward Revenue | $ -58.67 M | |
| COSTS | ||
| Cost Of Revenue | $ 79.7 M | |
| Depreciation | $ 7.8 M | |
| Depreciation and Amortization | $ 7.8 M | |
| Research and Development | $ 121.9 M | |
| Total Operating Expenses | $ 414.0 M | |
| PROFITABILITY | ||
| Gross Profit | $ 235.2 M | |
| EBITDA | $ -91.39 M | |
| EBIT | $ -99.17 M | |
| Operating Income | $ -99.17 M | |
| Interest Income | — | |
| Interest Expense | — | |
| Net Interest Income | — | |
| Income Before Tax | $ -79.64 M | |
| Tax Provision | $ -393.00 K | |
| Tax Rate | 0.493 % | |
| Net Income | $ -79.25 M | |
| Net Income From Continuing Operations | $ -79.25 M | |
| EARNINGS | ||
| EPS Estimate | $ 0.10 | |
| EPS Actual | $ 0.12 | |
| EPS Difference | $ 0.02 | |
| EPS Surprise | 20.0 % | |
| Forward EPS | $ 0.17 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 3.0 B | |
| Intangible Assets | $ 170.5 M | |
| Net Tangible Assets | $ 998.7 M | |
| Total Current Assets | $ 2.6 B | |
| Cash and Short-Term Investments | $ 2.1 B | |
| Cash | $ 347.2 M | |
| Net Receivables | $ 180.7 M | |
| Inventory | — | |
| Long-Term Investments | $ 31.9 M | |
| LIABILITIES | ||
| Accounts Payable | $ 20.7 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 680.6 M | |
| Net Debt | $ 748.8 M | |
| Total Debt | $ 1.1 B | |
| Total Liabilities | $ 1.8 B | |
| EQUITY | ||
| Total Equity | $ 1.2 B | |
| Retained Earnings | $ -2.28 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 3.28 | |
| Shares Outstanding | 356.138 M | |
| Revenue Per-Share | $ 0.88 | |
| VALUATION | Market Capitalization | $ 10.1 B |
| Enterprise Value | $ 9.1 B | |
| Enterprise Multiple | -100.059 | |
| Enterprise Multiple QoQ | 15.256 % | |
| Enterprise Multiple YoY | 14.878 % | |
| Enterprise Multiple IPRWA | high: 798.871 mean: 118.527 median: 61.115 CFLT: -100.059 low: -442.099 |
|
| EV/R | 29.046 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 2.553 | |
| Asset To Liability | 1.644 | |
| Debt To Capital | 0.486 | |
| Debt To Assets | 0.37 | |
| Debt To Assets QoQ | -3.718 % | |
| Debt To Assets YoY | -10.1 % | |
| Debt To Assets IPRWA | high: 0.687 CFLT: 0.37 mean: 0.168 median: 0.087 low: 0.004 |
|
| Debt To Equity | 0.945 | |
| Debt To Equity QoQ | -4.388 % | |
| Debt To Equity YoY | -18.125 % | |
| Debt To Equity IPRWA | high: 2.989 CFLT: 0.945 mean: 0.246 median: 0.147 low: -1.778 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 8.633 | |
| Price To Book QoQ | 29.884 % | |
| Price To Book YoY | -12.39 % | |
| Price To Book IPRWA | high: 39.175 mean: 11.508 median: 9.178 CFLT: 8.633 low: -21.803 |
|
| Price To Earnings (P/E) | 236.164 | |
| Price To Earnings QoQ | 44.364 % | |
| Price To Earnings YoY | -25.298 % | |
| Price To Earnings IPRWA | high: 522.411 CFLT: 236.164 mean: 127.909 median: 96.103 low: -185.3 |
|
| PE/G Ratio | -1.447 | |
| Price To Sales (P/S) | 32.059 | |
| Price To Sales QoQ | 28.685 % | |
| Price To Sales YoY | -11.582 % | |
| Price To Sales IPRWA | high: 116.554 mean: 45.263 median: 44.141 CFLT: 32.059 low: 4.135 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 154.384 | |
| Forward PE/G | -0.946 | |
| Forward P/S | -174.168 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 3.488 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.107 | |
| Asset Turnover Ratio QoQ | 2.432 % | |
| Asset Turnover Ratio YoY | 9.013 % | |
| Asset Turnover Ratio IPRWA | high: 0.373 mean: 0.13 median: 0.125 CFLT: 0.107 low: 0.0 |
|
| Receivables Turnover | 1.791 | |
| Receivables Turnover Ratio QoQ | 9.254 % | |
| Receivables Turnover Ratio YoY | 58.433 % | |
| Receivables Turnover Ratio IPRWA | high: 4.512 CFLT: 1.791 mean: 1.564 median: 1.485 low: 0.601 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 50.963 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | 31.711 | |
| Cash Conversion Cycle Days QoQ | -23.353 % | |
| Cash Conversion Cycle Days YoY | — | |
| Cash Conversion Cycle Days IPRWA | high: 130.17 CFLT: 31.711 mean: -47.506 median: -67.075 low: -67.09 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | 0.163 | |
| CapEx To Revenue | -0.021 | |
| CapEx To Depreciation | -0.847 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 2.3 B | |
| Net Invested Capital | $ 2.3 B | |
| Invested Capital | $ 2.3 B | |
| Net Tangible Assets | $ 998.7 M | |
| Net Working Capital | $ 1.9 B | |
| LIQUIDITY | ||
| Cash Ratio | 3.018 | |
| Current Ratio | 3.83 | |
| Current Ratio QoQ | -4.562 % | |
| Current Ratio YoY | -4.009 % | |
| Current Ratio IPRWA | high: 6.466 CFLT: 3.83 mean: 1.465 median: 1.386 low: 0.466 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | -12.095 | |
| Cost Of Debt | 0.081 % | |
| Interest Coverage Ratio | -110.193 | |
| Interest Coverage Ratio QoQ | 19.039 % | |
| Interest Coverage Ratio YoY | -6.249 % | |
| Interest Coverage Ratio IPRWA | high: 148.909 median: 66.552 mean: 46.372 low: -61.95 CFLT: -110.193 |
|
| Operating Cash Flow Ratio | -0.106 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 19.252 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | — | |
| Dividend Payout Ratio | — | |
| Dividend Rate | — | |
| Dividend Yield | — | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 3.76 % | |
| Revenue Growth | 5.459 % | |
| Revenue Growth QoQ | -5.11 % | |
| Revenue Growth YoY | 23.927 % | |
| Revenue Growth IPRWA | high: 19.11 % mean: 6.027 % CFLT: 5.459 % median: 4.58 % low: -7.075 % |
|
| Earnings Growth | -163.158 % | |
| Earnings Growth QoQ | 5.832 % | |
| Earnings Growth YoY | 1531.58 % | |
| Earnings Growth IPRWA | high: 153.333 % mean: 14.144 % median: 6.25 % low: -133.333 % CFLT: -163.158 % |
|
| MARGINS | ||
| Gross Margin | 74.696 % | |
| Gross Margin QoQ | 0.641 % | |
| Gross Margin YoY | 0.757 % | |
| Gross Margin IPRWA | high: 91.096 % CFLT: 74.696 % mean: 71.91 % median: 68.036 % low: 40.427 % |
|
| EBIT Margin | -31.502 % | |
| EBIT Margin QoQ | 12.878 % | |
| EBIT Margin YoY | -22.21 % | |
| EBIT Margin IPRWA | high: 78.69 % median: 60.268 % mean: 46.808 % CFLT: -31.502 % low: -44.038 % |
|
| Return On Sales (ROS) | -31.502 % | |
| Return On Sales QoQ | 12.878 % | |
| Return On Sales YoY | -22.21 % | |
| Return On Sales IPRWA | high: 76.917 % median: 47.094 % mean: 36.942 % low: -27.164 % CFLT: -31.502 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ 35.5 M | |
| Free Cash Flow Yield | 0.352 % | |
| Free Cash Flow Yield QoQ | 6.344 % | |
| Free Cash Flow Yield YoY | 14.658 % | |
| Free Cash Flow Yield IPRWA | high: 4.564 % CFLT: 0.352 % mean: 0.205 % median: 0.164 % low: -1.998 % |
|
| Free Cash Growth | 44.47 % | |
| Free Cash Growth QoQ | -63.962 % | |
| Free Cash Growth YoY | -79.014 % | |
| Free Cash Growth IPRWA | high: 265.627 % CFLT: 44.47 % mean: -24.012 % median: -77.08 % low: -132.549 % |
|
| Free Cash To Net Income | -0.448 | |
| Cash Flow Margin | -22.925 % | |
| Cash Flow To Earnings | 0.911 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.04 | |
| Return On Assets (ROA) | -2.704 % | |
| Return On Assets QoQ | 15.753 % | |
| Return On Assets YoY | -18.579 % | |
| Return On Assets IPRWA | high: 14.138 % median: 5.909 % mean: 4.582 % CFLT: -2.704 % low: -10.846 % |
|
| Return On Capital Employed (ROCE) | -4.303 % | |
| Return On Equity (ROE) | -0.068 | |
| Return On Equity QoQ | 14.05 % | |
| Return On Equity YoY | -26.012 % | |
| Return On Equity IPRWA | high: 0.298 median: 0.098 mean: 0.086 CFLT: -0.068 low: -0.282 |
|
| DuPont ROE | -6.927 % | |
| Return On Invested Capital (ROIC) | -4.357 % | |
| Return On Invested Capital QoQ | 46.552 % | |
| Return On Invested Capital YoY | -141.738 % | |
| Return On Invested Capital IPRWA | high: 20.316 % median: 9.056 % mean: 7.338 % CFLT: -4.357 % low: -11.474 % |
|