Earnings To Watch: Cloudflare Reports Q4 Results Tomorrow

Jabin Bastian /
2022/02/09 6:11 am EST

Internet security and content delivery network Cloudflare (NYSE:NET) will be announcing earnings results tomorrow after the bell. Here's what investors should know.

Last quarter Cloudflare reported revenues of $172.3 million, up 50.9% year on year, beating analyst revenue expectations by 4.04%. 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 39.6% year on year to $175.7 million, slowing down from the 50% year-over-year increase in revenue the company had recorded in the same quarter last year. Earnings are expected to come in at $0.00 per share.

Cloudflare Total Revenue

The analysts covering the company have been growing increasingly bullish about the business heading into the earnings, with revenue estimates seeing 7 upwards revisions over the last thirty days. 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 5.98%.

Looking at Cloudflare's peers in the software development segment, some of them have already reported Q4 earnings results, giving us a hint what we can expect. F5 Networks (NASDAQ:FFIV) delivered top-line growth of 10% year on year, beating analyst estimates by 1.31% and Dynatrace (NYSE:DT) reported revenues up 31.6% year on year, exceeding estimates by 2.67%. F5 Networks traded down 8.53% on results, Dynatrace was down 21.8% due to weak guidance and fears of increasing competition in the cloud monitoring segment. Read our full analysis of F5 Networks's results here and Dynatrace's results here.

Tech stocks have been under pressure since the end of last year and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 7.48% over the last month. Cloudflare is down 3.16% during the same time, and is heading into the earnings with with analyst price target of $161.8, compared to share price of $110.53.

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.