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Cloudflare (NET) Outpaces Stock Market Gains: What You Should Know

Cloudflare (NET) closed at $63.82 in the latest trading session, marking a +1.11% move from the prior day. This move outpaced the S&P 500's daily gain of 0.12%. At the same time, the Dow added 0.13%, and the tech-heavy Nasdaq lost 4.09%.

Prior to today's trading, shares of the web security and content delivery company had gained 26.19% over the past month. This has outpaced the Computer and Technology sector's gain of 9.32% and the S&P 500's gain of 3.98% in that time.

Cloudflare will be looking to display strength as it nears its next earnings release. Meanwhile, our latest consensus estimate is calling for revenue of $305.63 million, up 30.32% from the prior-year quarter.

NET's full-year Zacks Consensus Estimates are calling for earnings of $0.33 per share and revenue of $1.28 billion. These results would represent year-over-year changes of +153.85% and +31.36%, respectively.

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It is also important to note the recent changes to analyst estimates for Cloudflare. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Cloudflare is holding a Zacks Rank of #3 (Hold) right now.

Digging into valuation, Cloudflare currently has a Forward P/E ratio of 189.55. This represents a premium compared to its industry's average Forward P/E of 41.35.

It is also worth noting that NET currently has a PEG ratio of 7.58. 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 Internet - Software was holding an average PEG ratio of 1.63 at yesterday's closing price.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 96, which puts it in the top 39% of all 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.

You can find more information on all of these metrics, and much more, on Zacks.com.

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Cloudflare, Inc. (NET) : Free Stock Analysis Report

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