Last week, you might have seen that Cloudflare, Inc. (NYSE:NET) released its yearly result to the market. The early response was not positive, with shares down 3.2% to US$17.75 in the past week. The statutory results were mixed overall, with revenues of US$287m in line with analyst forecasts, but losses of US$0.72 per share, some 5.9% larger than analysts were predicting. This is an important time for investors, as they can track a company's performance in its report, look at what top analysts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether analysts have changed their mind on Cloudflare after the latest results.
Taking into account the latest results, the current consensus from Cloudflare's 14 analysts is for revenues of US$391.8m in 2020, which would reflect a major 36% increase on its sales over the past 12 months. Statutory losses are forecast to balloon 59% to US$0.30 per share. Before this latest report, the consensus had been expecting revenues of US$376.2m and US$0.32 per share in losses. So it seems there's been a definite increase in optimism about Cloudflare's future following the latest results, with a small increase to the earnings per share forecasts in particular.
It will come as no surprise to learn that analysts have increased their price target for Cloudflare 6.4% to US$22.61 on the back of these upgrades. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Cloudflare, with the most bullish analyst valuing it at US$25.00 and the most bearish at US$20.00 per share. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Cloudflare's past performance and to peers in the same market. We can infer from the latest estimates that analysts are expecting a continuation of Cloudflare's historical trends, as next year's forecast 36% revenue growth is roughly in line with 33% annual revenue growth over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although Cloudflare is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The most important thing to take away is that analysts increased their loss per share estimates for next year. Pleasantly, analysts also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider market. Analysts also upgraded their price target, suggesting that analysts believe the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Cloudflare analysts - going out to 2022, and you can see them free on our platform here.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.