Why Confluent Stock Fell 13% Today
The stock market is unforgivingly selling off tech stocks again today. The Nasdaq Composite index was down 3.1% as of 12:45 p.m. ET. Once high-flying software technologist Confluent (NASDAQ: CFLT) is being especially punished, down 13.3% on the day and now down over 70% year to date.
Today's sell-off in Confluent appears to be a continuation of the dramatic downturn last week after it reported first-quarter earnings. The company actually beat the average analyst's expectations.
However, Confluent is in growth mode right now as organizations look for new tools to manage their cloud computing and next-gen IT infrastructure. To maximize its opportunity to grab market share, Confluent is spending lots of money on sales and marketing, as well as on research and development. As a result, the company is generating ample losses -- free cash flow was negative $58 million in Q1 on revenue of $126 million. With the Federal Reserve aggressively raising interest rates and many investors worrying about the rising risk of a recession, companies that lose money like Confluent are currently out of favor.
Source Fool.com
