We assign a fundamental rating of 5 out of 10 to CWAN. CWAN was compared to 278 industry peers in the Software industry. CWAN has an average financial health and profitability rating. CWAN shows excellent growth, but is valued quite expensive already.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

CWAN had positive earnings in the past year.
In the past year CWAN had a positive cash flow from operations.
In the past 5 years CWAN reported 4 times negative net income.
CWAN had a positive operating cash flow in 4 of the past 5 years.

1.2 Ratios

CWAN has a better Return On Assets (13.12%) than 91.01% of its industry peers.
CWAN has a Return On Equity of 19.79%. This is amongst the best in the industry. CWAN outperforms 87.41% of its industry peers.
CWAN has a Return On Invested Capital (0.01%) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
ROA	13.12%
ROE	19.79%
ROIC	0.01%

ROA(3y)10.25%

ROA(5y)-1.97%

ROE(3y)11.01%

ROE(5y)N/A

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

CWAN's Profit Margin of 61.25% is amongst the best of the industry. CWAN outperforms 94.24% of its industry peers.
CWAN's Profit Margin has improved in the last couple of years.
With a Operating Margin value of 0.04%, CWAN perfoms like the industry average, outperforming 56.47% of the companies in the same industry.
CWAN's Operating Margin has declined in the last couple of years.
The Gross Margin of CWAN (68.53%) is comparable to the rest of the industry.
CWAN's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	0.04%
PM (TTM)	61.25%
GM	68.53%

OM growth 3Y-37.9%

OM growth 5Y-35.42%

PM growth 3YN/A

PM growth 5Y82.95%

GM growth 3Y-0.14%

GM growth 5Y0.23%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CWAN is destroying value.
CWAN has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, CWAN has more shares outstanding
Compared to 1 year ago, CWAN has an improved debt to assets ratio.

2.2 Solvency

CWAN has an Altman-Z score of 4.58. This indicates that CWAN is financially healthy and has little risk of bankruptcy at the moment.
CWAN has a Altman-Z score of 4.58. This is in the better half of the industry: CWAN outperforms 72.66% of its industry peers.
The Debt to FCF ratio of CWAN is 10.26, which is on the high side as it means it would take CWAN, 10.26 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 10.26, CWAN perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
A Debt/Equity ratio of 0.42 indicates that CWAN is not too dependend on debt financing.
CWAN has a Debt to Equity ratio of 0.42. This is in the lower half of the industry: CWAN underperforms 62.59% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.42
Debt/FCF	10.26
Altman-Z	4.58

ROIC/WACC0

WACC11.08%

2.3 Liquidity

A Current Ratio of 1.97 indicates that CWAN should not have too much problems paying its short term obligations.
With a Current ratio value of 1.97, CWAN perfoms like the industry average, outperforming 57.91% of the companies in the same industry.
CWAN has a Quick Ratio of 1.97. This is a normal value and indicates that CWAN is financially healthy and should not expect problems in meeting its short term obligations.
CWAN has a Quick ratio (1.97) which is comparable to the rest of the industry.

		Industry Rank	Sector Rank
Current Ratio	1.97
Quick Ratio	1.97

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WACC

Debt/Equity

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Altman-Z score

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3. Growth

3.1 Past

CWAN shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 23.81%, which is quite impressive.
Measured over the past years, CWAN shows a very strong growth in Earnings Per Share. The EPS has been growing by 110.89% on average per year.
The Revenue has grown by 50.91% in the past year. This is a very strong growth!
Measured over the past years, CWAN shows a very strong growth in Revenue. The Revenue has been growing by 21.88% on average per year.

EPS 1Y (TTM)23.81%

EPS 3YN/A

EPS 5Y110.89%

EPS Q2Q%16.67%

Revenue 1Y (TTM)50.91%

Revenue growth 3Y21.48%

Revenue growth 5Y21.88%

Sales Q2Q%77.08%

3.2 Future

Based on estimates for the next years, CWAN will show a very strong growth in Earnings Per Share. The EPS will grow by 28.07% on average per year.
Based on estimates for the next years, CWAN will show a very strong growth in Revenue. The Revenue will grow by 27.52% on average per year.

EPS Next Y25.23%

EPS Next 2Y25.51%

EPS Next 3Y26.56%

EPS Next 5Y28.07%

Revenue Next Year63.93%

Revenue Next 2Y45.65%

Revenue Next 3Y35.86%

Revenue Next 5Y27.52%

3.3 Evolution

Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 46.33, which means the current valuation is very expensive for CWAN.
CWAN's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of CWAN to the average of the S&P500 Index (28.32), we can say CWAN is valued expensively.
Based on the Price/Forward Earnings ratio of 33.98, the valuation of CWAN can be described as expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CWAN is on the same level as its industry peers.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.57, CWAN is valued a bit more expensive.

		Industry Rank	Sector Rank
PE	46.33
Fwd PE	33.98

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CWAN is on the same level as its industry peers.
CWAN's Price/Free Cash Flow ratio is in line with the industry average.

		Industry Rank	Sector Rank
P/FCF	86.2
EV/EBITDA	130.84

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
CWAN's earnings are expected to grow with 26.56% in the coming years. This may justify a more expensive valuation.