Stifel Downgrades Confluent with Lower Price Target to $21.00 USD, Marking a 30% Decrease.

Stifel downgraded Confluent (CFLT) from "Buy" to "Hold" and lowered its price target from $30 to $21, a 30% decrease. The downgrade reflects a cautious outlook on the stock's performance, and the price target adjustment suggests a challenging market environment for Confluent. Investors should note these changes when evaluating their positions and investment strategies. The average target price for Confluent is $29.34 with a high estimate of $40 and a low estimate of $22.

Stifel, a leading financial services firm, has downgraded Confluent (CFLT) stock from "Buy" to "Hold" and reduced its price target from $30 to $21, marking a significant 30% decrease. This move reflects a cautious outlook on the stock's performance and underscores the challenges Confluent faces in the current market environment.

The downgrade comes amidst growing concerns over Confluent's cloud growth prospects. Stifel analyst Brad Reback highlighted several key issues, including continued cloud usage optimization by existing customers, slower net new workload activity, and a lack of new customer additions. Additionally, an AI customer transitioning from Confluent's cloud offering to a self-managed platform is expected to lower cloud growth by "low-single digits" starting in the fourth quarter [1].

Despite these challenges, Confluent's financial performance in the second quarter was strong. The company reported an adjusted earnings per share (EPS) of 9 cents, exceeding consensus estimates of 8 cents. Revenue increased 20% year-over-year to $282.3 million, with subscription revenue growing by 21% to $271 million [2].

However, the market's focus has shifted to Confluent's forward-looking forecast, which was perceived as lackluster. The company guided for subscription revenue between $281-$282 million and non-GAAP earnings per share of $0.09-$0.10 for the third quarter. This outlook has prompted a flurry of analyst revisions, with several firms lowering their price targets on CFLT stock [3].

The downgrade by Stifel is part of a broader trend of caution among investors. Confluent's stock has been volatile, with shares tumbling over 30% in recent trading. The stock is currently trading at $17.83, down from a 52-week high of $37.90. The average target price for Confluent is $29.34, with a high estimate of $40 and a low estimate of $22 [1].

Investors should carefully evaluate these changes when considering their positions and investment strategies. The market's reaction to Confluent's earnings report and guidance indicates a challenging environment for the stock. However, some analysts remain bullish, citing long-term growth drivers such as increasing demand for real-time data streaming and emerging generative AI opportunities [1].

References:
[1] https://www.investors.com/news/technology/confluent-stock-q2-2025-earnings-results-ai-cflt-news/
[2] https://www.inkl.com/news/confluent-cflt-stock-plummets-nearly-30-on-muted-q3-outlook
[3] https://www.investing.com/news/analyst-ratings/stifel-downgrades-confluent-stock-to-hold-on-cloud-growth-concerns-93CH-4161965