This tech stock expects earnings to grow 325% in 2024

This tech stock expects earnings to grow 325% in 2024, and that's not Nvidia, Intel, Microsoft, or even Advanced Micro Devices, which recently launched its own AI chip.
After a 2023 year marked by solid profits in the tech sector, experts are optimistic about 2024, predicting a 17% increase in earnings per share (EPS) and 9.1% increase in revenues, according to FactSet estimates.
In a landscape where technology and artificial intelligence dictate the law, there is a stock that stands out for its exceptional performance and its promising growth prospect: since the beginning of the year, the shares of this company listed on the Nasdaq have risen by over 47%.
Here's what stock it is and why it is destined to dominate the financial markets in the coming months.
Why This Tech Stock Expects Earnings to Grow 325% in 2024 We're talking about Confluent, a Mountain View, California-based software company that's on the cutting edge of real-time data management and advanced analytics.
Its mission is to help companies make faster and more effective decisions based on incoming data, acting as a true “central nervous system” for monitoring data in real time.
Confluent expects earnings growth of 325% in 2024 thanks to its strong position in the real-time data sector.
The recent surge in data streaming comes after Confluent ended 2023 with stock price losses for five of the final six months of the year.
However, concerns faded when Confluent reported a 26% sales increase to $213.2 million in the fourth quarter.
The company expects its 2024 revenue to reach $950 million, a 22% increase over 2023.
Additionally, it expects earnings to increase 325% to 17 cents from 4 cents in 2023, in line with current forecasts of Wall Street.
Strong customer demand for AI applications, such as chatbots and coding platforms, continues to support Confluent's growth as it positions itself as a key infrastructure for such applications.
Flink's integration for streaming data processing allows organizations to act on data as it arrives, rather than waiting for batch processing at the end of the day.
The practical applications of this real-time data are diverse and include areas such as logistics, pricing and planning.
Analyst Forecasts Recently, experts at Stifel, a brokerage and investment banking firm, assigned Confluent stock a “buy” rating and a price target of $40 dollars, which implies an upside of 18% from current levels.
Stifel's analysis highlights Confluent's significant role in modernizing data architectures, based on widely used open-source software, Kafka and Flink.
Additionally, the company highlighted Confluent's presence in more than 75% of Fortune 500 companies and its adoption by approximately 150,000 organizations globally.
Q4 Financial Results In the fourth quarter, total revenue increased 26% to $213.2 million.
Subscription revenue of $202.8 million grew 31%, led by Confluent Cloud revenue (47% of total) which increased 46% to $100 million, exceeding guidance of $97.8 millions.
Gross margin increased 450 basis points year-over-year to a record 77.5%, while subscription revenue gross margin increased 240 basis points to a record 81.1%.
Operating profit was 5.3%.
Confluent operates in a rapidly expanding market.
The data streaming category is growing in both scale and use, as more organizations recognize the benefits of real-time analysis of their data.
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