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Cloudflare (NET) to Post Q3 Earnings: What's in the Offing?
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Cloudflare (NET - Free Report) is slated to release third-quarter 2021 results on Nov 4.
The company projects quarterly revenues between $165 and $166 million. The Zacks Consensus Estimate for the top line is currently pegged at $165.9 million, indicating an improvement of 45.3% year over year.
The web infrastructure and website security solution provider expects to report non-GAAP net loss per share between 3 cents and 4 cents in the quarter. The consensus mark has remained unchanged at a loss of 4 cents per share for the past 30 days.
Cloudflare projects its quarterly loss from operations on a non-GAAP basis between $8.5 million and $9.5 million.
Let’s see how things have shaped up for the upcoming announcement.
Cloudflare’s diversified customer base is anticipated to have aided its top-line growth during the third quarter. During the second quarter, it added roughly 7,535 new paying customers sequentially, bringing the total count to 126,735 across more than 160 countries.
Large customers (annual billings of more than $100,000) were 1,088 at the end of the second quarter, up from the 945 recorded at the end of the first. This uptrend, which has prevailed for the past few quarters, is likely to have continued in the to-be-reported quarter as well on elevated demand for its cloud-based solutions amid the pandemic-led remote-working wave.
Further, Cloudflare’s recurring subscription-based business model provides relative stability to its top line, despite the COVID-19 pandemic-induced disruptions.
Additionally, Cloudflare’s third-quarter performance is likely to have benefited from solid demand for security solutions, which became imperative owing to the aggravated cyberattacks, work and learn from home policies and a zero-trust approach.
Moreover, the company’s to-be-reported quarter top line is likely to reflect the impact of accelerated global footprint expansion outside of the United States. Notably, geographically, the United States, EMEA and APAC represented 52%, 26% and 16% of total revenues, respectively, in the last quarter.
However, Cloudflare’s significant exposure to small and medium businesses (SMBs), the worst-hit cohort by the pandemic, might have weighed on its performance in the quarter to be reported.
What Our Model Says
Our proven model does not predict an earnings beat for Cloudflare this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Cloudflare currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:
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Cloudflare (NET) to Post Q3 Earnings: What's in the Offing?
Cloudflare (NET - Free Report) is slated to release third-quarter 2021 results on Nov 4.
The company projects quarterly revenues between $165 and $166 million. The Zacks Consensus Estimate for the top line is currently pegged at $165.9 million, indicating an improvement of 45.3% year over year.
The web infrastructure and website security solution provider expects to report non-GAAP net loss per share between 3 cents and 4 cents in the quarter. The consensus mark has remained unchanged at a loss of 4 cents per share for the past 30 days.
Cloudflare projects its quarterly loss from operations on a non-GAAP basis between $8.5 million and $9.5 million.
Let’s see how things have shaped up for the upcoming announcement.
Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote
Factors to Consider
Cloudflare’s diversified customer base is anticipated to have aided its top-line growth during the third quarter. During the second quarter, it added roughly 7,535 new paying customers sequentially, bringing the total count to 126,735 across more than 160 countries.
Large customers (annual billings of more than $100,000) were 1,088 at the end of the second quarter, up from the 945 recorded at the end of the first. This uptrend, which has prevailed for the past few quarters, is likely to have continued in the to-be-reported quarter as well on elevated demand for its cloud-based solutions amid the pandemic-led remote-working wave.
Further, Cloudflare’s recurring subscription-based business model provides relative stability to its top line, despite the COVID-19 pandemic-induced disruptions.
Additionally, Cloudflare’s third-quarter performance is likely to have benefited from solid demand for security solutions, which became imperative owing to the aggravated cyberattacks, work and learn from home policies and a zero-trust approach.
Moreover, the company’s to-be-reported quarter top line is likely to reflect the impact of accelerated global footprint expansion outside of the United States. Notably, geographically, the United States, EMEA and APAC represented 52%, 26% and 16% of total revenues, respectively, in the last quarter.
However, Cloudflare’s significant exposure to small and medium businesses (SMBs), the worst-hit cohort by the pandemic, might have weighed on its performance in the quarter to be reported.
What Our Model Says
Our proven model does not predict an earnings beat for Cloudflare this season. The combination of a positive Earnings ESP, and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), increases the chances of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell, before they’re reported, with our Earnings ESP Filter.
Cloudflare currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%.
Stocks With Favorable Combinations
Here are some companies, which, per our model, have the right combination of elements to post an earnings beat in their upcoming release:
HP (HPQ - Free Report) has an Earnings ESP of +1.89% and currently sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Materials (AMAT - Free Report) has an Earnings ESP of +0.52% and holds a Zacks Rank of 2, currently.
QUALCOMM (QCOM - Free Report) has an Earnings ESP of +0.35% and carries a Zacks Rank #3, at present.