Cloudflare (NET) Exceeds Market Returns: Some Facts to Consider
Cloudflare (NET) closed the most recent trading day at $99.92, moving +1.4% from the previous trading session. The stock exceeded the S&P 500, which registered a gain of 0.8% for the day. At the same time, the Dow added 0.23%, and the tech-heavy Nasdaq gained 1.14%.
The web security and content delivery company's stock has climbed by 23.81% in the past month, exceeding the Computer and Technology sector's gain of 5.97% and the S&P 500's gain of 5.2%.
Investors will be eagerly watching for the performance of Cloudflare in its upcoming earnings disclosure. The company is expected to report EPS of $0.13, up 62.5% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $372.93 million, indicating a 28.52% growth compared to the corresponding quarter of the prior year.
For the full year, the Zacks Consensus Estimates are projecting earnings of $0.58 per share and revenue of $1.65 billion, which would represent changes of +18.37% and +27.2%, respectively, from the prior year.
Investors should also take note of any recent adjustments to analyst estimates for Cloudflare. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To capitalize on this, we've crafted the Zacks Rank, a unique model that incorporates these estimate changes and offers a practical rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 12.06% upward. At present, Cloudflare boasts a Zacks Rank of #3 (Hold).
In terms of valuation, Cloudflare is presently being traded at a Forward P/E ratio of 170.78. For comparison, its industry has an average Forward P/E of 31.78, which means Cloudflare is trading at a premium to the group.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 61, this industry ranks in the top 25% of all industries, numbering over 250.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Don't forget to use Zacks.com to keep track of all these stock-moving metrics, and others, in the upcoming trading sessions.
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Cloudflare, Inc. (NET) : Free Stock Analysis Report
