Here's Why Cloudflare (NET) Fell More Than Broader Market

In the latest trading session, Cloudflare (NET) closed at $218.38, marking a -2.54% move from the previous day. The stock fell short of the S&P 500, which registered a loss of 0.37% for the day. Elsewhere, the Dow gained 0.29%, while the tech-heavy Nasdaq lost 1.33%. Shares of the web security and content delivery company have appreciated by 3.65% over the course of the past month, underperforming the Computer and Technology sector's gain of 4.52%, and outperforming the S&P 500's gain of 2.02%.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 $0.27, up 28.57% from the prior-year quarter. In the meantime, our current consensus estimate forecasts the revenue to be $665.42 million, indicating a 29.88% growth compared to the corresponding quarter of the prior year. For the full year, the Zacks Consensus Estimates project earnings of $1.2 per share and a revenue of $2.81 billion, demonstrating changes of +29.03% and +29.72%, respectively, from the preceding year. Investors should also note any recent changes to analyst estimates for Cloudflare. These latest adjustments often mirror the shifting dynamics of short-term business patterns. Consequently, upward revisions in estimates express analysts' positivity towards the business operations and its ability to generate profits. Based on our research, we believe these estimate revisions are directly related to near-term stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model. The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 425% higher within the past month. Currently, Cloudflare is carrying a Zacks Rank of #2 (Buy). From a valuation perspective, Cloudflare is currently exchanging hands at a Forward P/E ratio of 186.72. This represents a premium compared to its industry average Forward P/E of 18.33. It is also worth noting that NET currently has a PEG ratio of 4.33. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The average PEG ratio for the Internet - Software industry stood at 0.99 at the close of the market yesterday. The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 84, positioning it in the top 35% of all 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. Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions. Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. Large hyperscalers, such as Microsoft, Google, Amazon, Oracle, and even Meta and Tesla, are scrambling to integrate quantum computing into their infrastructure.Senior Stock Strategist Kevin Cook reveals 7 carefully selected stocks poised to dominate the quantum computing landscape in his report, Beyond AI: The Quantum Leap in Computing Power.Kevin was among the early experts who recognized NVIDIA's enormous potential back in 2016. Now, he has keyed in on what could be "the next big thing" in quantum computing supremacy. Today, you have a rare chance to position your portfolio at the forefront of this opportunity.See Top Quantum Stocks Now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks