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%.
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.
The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
To follow NET in the coming trading sessions, be sure to utilize Zacks.com.
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Cloudflare, Inc. (NET): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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