Cloudflare (NET) Reports Q1: Everything You Need To Know Ahead Of Earnings

Jabin Bastian /
2022/05/04 7:48 am EDT
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Internet security and content delivery network Cloudflare (NYSE:NET) will be reporting earnings tomorrow after market close. Here's what you need to know.

Last quarter Cloudflare reported revenues of $193.5 million, up 53.7% year on year, beating analyst revenue expectations by 4.72%. It was a very strong quarter for the company, with an exceptional revenue growth and a very optimistic guidance for the next quarter.

Is Cloudflare buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Cloudflare's revenue to grow 48.9% year on year to $205.6 million, in line with the 51.2% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.0 per share.

Cloudflare Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 5.81%.

Looking at Cloudflare's peers in the software development segment, some of them have already reported Q1 earnings results, giving us a hint what we can expect. F5 Networks's revenues decreased 1.71% year on year, in-line with analyst estimates and Akamai reported revenues up 7.23% year on year, missing analyst estimates by 0.13%. F5 Networks traded down 1.4% on the results, while Akamai traded down 6.8%. Read our full analysis of F5 Networks's results here and Akamai's results here.

The whole tech sector has been facing a sell-off since late last year and software stocks have not been spared, with share price down on average 16.6% over the last month. Cloudflare is down 27.8% during the same time, and is heading into the earnings with analyst price target of $148.8, compared to share price of $90.25.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.