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Cloudflare (NET) closed the latest trading day at $123.93, indicating a +0.68% change from the previous session's end. The stock exceeded the S&P 500, which registered a gain of 0.53% for the day. Meanwhile, the Dow experienced a rise of 0.93%, and the technology-dominated Nasdaq saw an increase of 0.22%.
Heading into today, shares of the web security and content delivery company had gained 9.34% over the past month, outpacing the Computer and Technology sector's gain of 3.02% and the S&P 500's gain of 2.69% in that time.
Market participants will be closely following the financial results of Cloudflare in its upcoming release. The company plans to announce its earnings on February 6, 2025. The company is expected to report EPS of $0.18, up 20% from the prior-year quarter. Meanwhile, the latest consensus estimate predicts the revenue to be $451.8 million, indicating a 24.65% increase compared to the same quarter of the previous year.
Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Cloudflare. Such recent modifications usually signify the changing landscape of near-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the company's business and profitability.
Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.
The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 29.09% higher within the past month. Cloudflare is currently a Zacks Rank #2 (Buy).
In the context of valuation, Cloudflare is at present trading with a Forward P/E ratio of 146.22. For comparison, its industry has an average Forward P/E of 29.37, which means Cloudflare is trading at a premium to the group.
The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 38, this industry ranks in the top 16% of all industries, numbering over 250.
The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.