Is Clearwater Analytics Holdings, Inc. overvalued or undervalued?

As of 29 July 2025, Clearwater Analytics Holdings, Inc. moved from an attractive to a very attractive valuation grade. The company appears undervalued given its P/E ratio of 14, which is significantly lower than the peer average, and a high ROE of 44.55%, indicating strong profitability relative to equity. Additionally, the EV to EBITDA ratio stands at 139.11, suggesting that the market may not be fully recognizing the company's earnings potential.
In comparison to its peers, Clearwater's valuation metrics are notably more favorable; for instance, Sportradar Group AG has a P/E of 74.43, while EverCommerce, Inc. shows a P/E of 47.08, both indicating higher valuations despite lower returns. The company's recent stock performance has lagged behind the S&P 500, with a year-to-date return of -29.83% compared to the index's 12.22%, reinforcing the notion that Clearwater may be undervalued in the current market environment.