Why Cloudflare (NET) Dipped More Than Broader Market Today
In the latest trading session, Cloudflare (NET) closed at $97.06, marking a -0.95% move from the previous day. This move lagged the S&P 500's daily loss of 0.11%. Elsewhere, the Dow saw an upswing of 0.12%, while the tech-heavy Nasdaq depreciated by 0.41%.
The web security and content delivery company's stock has dropped by 9.2% in the past month, falling short of the Computer and Technology sector's gain of 1.42% and the S&P 500's gain of 2.7%.
Market participants will be closely following the financial results of Cloudflare in its upcoming release. In that report, analysts expect Cloudflare to post earnings of $0.13 per share. This would mark year-over-year growth of 62.5%. Meanwhile, our latest consensus estimate is calling for revenue of $372.93 million, up 28.52% from the prior-year quarter.
Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.58 per share and revenue of $1.65 billion. These totals would mark changes of +18.37% and +27.2%, respectively, from last year.
Investors should also take note of any recent adjustments to analyst estimates for Cloudflare. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, running from #1 (Strong Buy) to #5 (Strong Sell), holds an admirable track record of superior performance, independently audited, with #1 stocks contributing an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 19.15% higher. Cloudflare is currently a Zacks Rank #3 (Hold).
Looking at its valuation, Cloudflare is holding a Forward P/E ratio of 168.3. This expresses a premium compared to the average Forward P/E of 30.67 of its industry.
The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 48, putting it in the top 20% of all 250+ industries.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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Cloudflare, Inc. (NET) : Free Stock Analysis Report
