Confluent Shareholders Locked In Higher Value With IBM's Buyout

Hong Chew Eu1.39K FollowersFollow5ShareSavePlay(20min)CommentsSummaryConfluent operates in a structurally growing real-time data streaming market, delivering double-digit revenue growth but remaining unprofitable.The company is expected to reach breakeven in 2027, driven by expanding gross margins, declining fixed cost margins, and high operating leverage.Despite a strong cash position and improving operational metrics, Confluent underperforms peers on return on capital, EBIT margin, EPS, and free cash flow.Even under optimistic growth and margin assumptions, Confluent’s intrinsic value ($23/share) is below the current market price and IBM' offer price. Shutthiphong Chandaeng/iStock via Getty Images Introduction In December 2025, International Business Machines Corporation (IBM) announced a definitive agreement to acquire Confluent Inc. (CFLT) for about $11 billion, equivalent to about $31 per share. This all-cash offer is expected to beThis article was written byHong Chew Eu1.39K FollowersFollowBSc (Eng), MBA. Self-taught value investor with 2 decades of investing experience. Blogger at i4value.asia. The blog is on value investing through case studies where I analyze and value listed companies in the ASEAN and US regions. I have an exceptional perspective having served as a Board member of a Malaysia listed company for several decades. I have value investing book "Do you really want to master value investing?" on AmazonAnalyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.