Cloudflare (NET) Rises Yet Lags Behind Market: Some Facts Worth Knowing

In the latest market close, Cloudflare (NET) reached $95.17, with a +0.56% movement compared to the previous day. This move lagged the S&P 500's daily gain of 0.57%. At the same time, the Dow added 0.83%, and the tech-heavy Nasdaq gained 0.39%.

The web security and content delivery company's shares have seen a decrease of 3.94% over the last month, not keeping up with the Computer and Technology sector's gain of 3.42% and the S&P 500's gain of 2.97%.

The investment community will be closely monitoring the performance of Cloudflare in its forthcoming earnings report. The company's upcoming EPS is projected at $0.13, signifying a 62.5% increase compared to the same quarter of the previous year. Our most recent consensus estimate is calling for quarterly revenue of $372.93 million, up 28.52% from the year-ago period.

For the full year, the Zacks Consensus Estimates project earnings of $0.58 per share and a revenue of $1.65 billion, demonstrating changes of +18.37% and +27.2%, respectively, from the preceding year.

Investors might also notice recent changes to analyst estimates for Cloudflare. Such recent modifications usually signify the changing landscape of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 8.56% higher. As of now, Cloudflare holds a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Cloudflare has a Forward P/E ratio of 162.55 right now. This indicates a premium in contrast to its industry's Forward P/E of 30.15.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 42, placing it within the top 17% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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