Zacks Equity Research
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In the latest close session, Cloudflare (NET) was up +2.55% at $183.87. The stock outpaced the S&P 500’s daily gain of 0.96%. Elsewhere, the Dow saw an upswing of 0.89%, while the tech-heavy Nasdaq appreciated by 0.94%.
Prior to today’s trading, shares of the web security and content delivery company had gained 13.45% outpaced the Computer and Technology sector’s gain of 2.53% and the S&P 500’s gain of 0.5%.
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The investment community will be paying close attention to the earnings performance of Cloudflare in its upcoming release. The company is expected to report EPS of $0.18, down 10% from the prior-year quarter. At the same time, our most recent consensus estimate is projecting a revenue of $500.72 million, reflecting a 24.87% rise from the equivalent quarter last year.
Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $0.79 per share and revenue of $2.09 billion, indicating changes of +5.33% and +25.38%, respectively, compared to the previous year.
Investors should also note any recent changes to analyst estimates for Cloudflare. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the business health and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. 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.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has witnessed a 0.87% increase. Cloudflare is holding a Zacks Rank of #3 (Hold) right now.
Looking at its valuation, Cloudflare is holding a Forward P/E ratio of 226.3. This indicates a premium in contrast to its industry’s Forward P/E of 27.81.
Investors should also note that NET has a PEG ratio of 9.21 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company’s expected earnings growth trajectory. The Internet – Software industry currently had an average PEG ratio of 2.1 as of yesterday’s close.
The Internet – Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 54, placing it within the top 22% of over 250 industries.
