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Cloudflare (NET) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research
·2 min read

In the latest trading session, Cloudflare (NET) closed at $54, marking a -1.39% move from the previous day. This change lagged the S&P 500's daily gain of 1.2%. Meanwhile, the Dow gained 0.53%, and the Nasdaq, a tech-heavy index, added 1.64%.

Prior to today's trading, shares of the web security and content delivery company had gained 33.37% over the past month. This has outpaced the Computer and Technology sector's loss of 1.12% and the S&P 500's loss of 2.23% in that time.

Wall Street will be looking for positivity from NET as it approaches its next earnings report date. This is expected to be November 5, 2020. In that report, analysts expect NET to post earnings of -$0.05 per share. This would mark year-over-year growth of 68.75%. Meanwhile, our latest consensus estimate is calling for revenue of $103.12 million, up 39.46% from the prior-year quarter.

NET's full-year Zacks Consensus Estimates are calling for earnings of -$0.17 per share and revenue of $406.43 million. These results would represent year-over-year changes of +64.58% and +41.6%, respectively.

It is also important to note the recent changes to analyst estimates for NET. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. NET is currently sporting a Zacks Rank of #3 (Hold).

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 159, putting it in the bottom 38% of all 250+ industries.

The Zacks Industry Rank includes is listed in order 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.

To follow NET in the coming trading sessions, be sure to utilize Zacks.com.


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