We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Cloudflare Q2 Preview: Can Shares Continue Their Recovery?
Read MoreHide Full Article
It’s no secret that it’s been a poor year for tech. A Fed tightening cycle has recalibrated many of these stocks, putting dents in many portfolios.
The Zacks Computer and Technology Sector is down more than 20% in 2022 vs. the S&P 500’s decline of roughly 13%. However, the sector has posted a remarkable 9.6% return over the last month, notably higher than the S&P 500’s 7.8% return.
The table below shows the performance of the sector and the S&P 500 over several timeframes.
Image Source: Zacks Investment Research
Cloudflare (NET - Free Report) , a company residing in the sector, is slated to release quarterly results on Thursday, August 4th, after market close. Cloudflare is a global network designed to make everything connected to the Internet secure, private, fast, and reliable.
How does the company stack up heading into the quarterly release? Let’s dig a little deeper and find out.
Share Performance & Valuation
Year-to-date, Cloudflare shares have plunged, losing nearly 60% of their value and coming nowhere near the general market’s performance.
Image Source: Zacks Investment Research
However, the story visibly changes upon looking at the last month of share performance. Cloudflare shares have gained 17%, crushing the S&P 500’s return of nearly 8%.
Image Source: Zacks Investment Research
Amid a somewhat clearer economic outlook, investors have pivoted back to tech as of late, driving shares upwards.
In addition, shares appear overvalued, further bolstered by its Style Score of an F for Value.
Quarterly Estimates
Analysts have been silent over the last 60 days, with zero estimate revisions coming in. Still, the -$0.01 Zacks Consensus EPS Estimate pencils in a 50% uptick in quarterly earnings year-over-year.
Image Source: Zacks Investment Research
In addition, the top-line is forecasted to get a serious boost – Cloudflare is forecasted to rake in $227.5 million in revenue for the quarter, good enough for a sizable 50% uptick compared to year-ago quarterly sales of $152.4 million.
Quarterly Performance & Market Reactions
NET’s bottom-line results have been strong as of late, exceeding the Zacks Consensus EPS Estimate in four of its previous five quarters.
Top-line results have also been remarkable; NET has chained together eleven consecutive revenue beats. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
The market hasn’t reacted well to the company’s recent earnings reports – following its last two quarterly releases, shares have decreased by 15% and 9%, respectively.
Putting Everything Together
Cloudflare shares are the victim of a deep double-digit valuation slash year-to-date, but shares have been hot over the last month.
Analysts have been quiet as of late, but quarterly estimates reflect sizable growth on both the top and bottom-line. In addition, quarterly results have primarily been reported above expectations.
However, as of late, the market has reacted poorly to the company’s quarterly prints, with shares moving downwards by a wide margin following the last two.
Heading into the print, Cloudflare (NET - Free Report) is a Zacks Rank #4 (Sell) with an overall VGM Score of an F.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Cloudflare Q2 Preview: Can Shares Continue Their Recovery?
It’s no secret that it’s been a poor year for tech. A Fed tightening cycle has recalibrated many of these stocks, putting dents in many portfolios.
The Zacks Computer and Technology Sector is down more than 20% in 2022 vs. the S&P 500’s decline of roughly 13%. However, the sector has posted a remarkable 9.6% return over the last month, notably higher than the S&P 500’s 7.8% return.
The table below shows the performance of the sector and the S&P 500 over several timeframes.
Image Source: Zacks Investment Research
Cloudflare (NET - Free Report) , a company residing in the sector, is slated to release quarterly results on Thursday, August 4th, after market close. Cloudflare is a global network designed to make everything connected to the Internet secure, private, fast, and reliable.
How does the company stack up heading into the quarterly release? Let’s dig a little deeper and find out.
Share Performance & Valuation
Year-to-date, Cloudflare shares have plunged, losing nearly 60% of their value and coming nowhere near the general market’s performance.
Image Source: Zacks Investment Research
However, the story visibly changes upon looking at the last month of share performance. Cloudflare shares have gained 17%, crushing the S&P 500’s return of nearly 8%.
Image Source: Zacks Investment Research
Amid a somewhat clearer economic outlook, investors have pivoted back to tech as of late, driving shares upwards.
In addition, shares appear overvalued, further bolstered by its Style Score of an F for Value.
Quarterly Estimates
Analysts have been silent over the last 60 days, with zero estimate revisions coming in. Still, the -$0.01 Zacks Consensus EPS Estimate pencils in a 50% uptick in quarterly earnings year-over-year.
Image Source: Zacks Investment Research
In addition, the top-line is forecasted to get a serious boost – Cloudflare is forecasted to rake in $227.5 million in revenue for the quarter, good enough for a sizable 50% uptick compared to year-ago quarterly sales of $152.4 million.
Quarterly Performance & Market Reactions
NET’s bottom-line results have been strong as of late, exceeding the Zacks Consensus EPS Estimate in four of its previous five quarters.
Top-line results have also been remarkable; NET has chained together eleven consecutive revenue beats. The chart below illustrates the company’s revenue on a quarterly basis.
Image Source: Zacks Investment Research
The market hasn’t reacted well to the company’s recent earnings reports – following its last two quarterly releases, shares have decreased by 15% and 9%, respectively.
Putting Everything Together
Cloudflare shares are the victim of a deep double-digit valuation slash year-to-date, but shares have been hot over the last month.
Analysts have been quiet as of late, but quarterly estimates reflect sizable growth on both the top and bottom-line. In addition, quarterly results have primarily been reported above expectations.
However, as of late, the market has reacted poorly to the company’s quarterly prints, with shares moving downwards by a wide margin following the last two.
Heading into the print, Cloudflare (NET - Free Report) is a Zacks Rank #4 (Sell) with an overall VGM Score of an F.