TLDR
- Cloudflare (NET) shares declined 0.56% to $119.40, contrasting with S&P 500’s 0.49% gain
- NET has dropped 30.41% over the past month, falling behind both its tech sector and the broader market
- Analysts project $0.16 EPS with revenue reaching $468.78 million, reflecting 23.82% year-over-year growth
- Multiple analysts maintain Buy ratings, including Truist Financial’s Joel Fishbein
- The average price target stands at $161.41, suggesting a 35.18% upside from current levels
Cloudflare shares ended the recent trading session at $119.40, dipping 0.56%. The decline occurred while the broader market moved in the opposite direction, with the S&P 500 gaining 0.49%.
The contrast was even more pronounced against the tech-heavy Nasdaq index. The Nasdaq climbed 1.22% during the same session while Cloudflare trended lower.
This single-day movement continues a challenging period for the web security and content delivery company. NET stock has tumbled 30.41% over the last month.
This performance falls well short of its peers. The Computer and Technology sector declined 12.07% during the same period, while the S&P 500 dropped 8.15%.
The recent weakness comes as investors await Cloudflare’s upcoming earnings announcement. Analysts expect the company to report earnings of $0.16 per share for the quarter.
This would represent flat earnings growth compared to the same period last year. However, the revenue picture appears more positive for the company.
Consensus estimates project quarterly revenue of $468.78 million. This figure would mark a substantial 23.82% increase from the comparable quarter in the previous year.
Full-year projections tell a similar story of revenue growth outpacing earnings improvements. Analysts expect annual earnings of $0.80 per share, representing a 6.67% increase.
Revenue for the entire year is forecasted to reach $2.09 billion. This would translate to a 25.32% jump from the prior year’s results.
Valuation metrics highlight Cloudflare’s premium positioning relative to industry peers. The company currently trades at a Forward P/E ratio of 150.46.
This valuation stands considerably higher than the Internet – Software industry’s average Forward P/E of 26.7. Cloudflare operates within this industry group, which ranks in the top third of all sectors tracked.
Despite the recent price weakness and premium valuation, several analysts maintain positive outlooks on the stock. Truist Financial analyst Joel Fishbein recently reiterated his Buy rating.
Fishbein brings credibility to this assessment, having demonstrated a 14.9% average return and 58.63% success rate on his recommendations. He specializes in the Technology sector with emphasis on cybersecurity companies.
The broader analyst community holds a Moderate Buy consensus on Cloudflare shares. The average price target stands at $161.41, indicating analysts see potential for a 35.18% rise from current levels.
Needham also recently maintained its Buy rating with a $145.00 price target. These positive analyst views suggest professional investors see the current weakness as temporary.
Historical trading data shows Cloudflare’s volatile price action over the past year. The stock has traded as high as $177.37 and as low as $66.24 during this period.
The company maintains an average daily trading volume of 3.83 million shares. This volume indicates active market participation and liquidity for investors.
The current price sits at an intermediate point between the yearly highs and lows. This positioning comes as market participants evaluate Cloudflare’s growth trajectory against broader economic conditions.
