Why Has Cloudflare Stock Gained In Recent Weeks?
Cloudflare (NYSE: NET), a web infrastructure and security company, has seen its stock rally by more than 17% over the last two weeks. The recent rally comes after the company saw a relatively mixed stock market debut in September, with its price briefly dipping below its IPO price of $15. The run-up in the stock is likely driven by stronger than expected revenues growth over Q3, with sales up ~48% year-over-year to $73.9 million, beating estimates by $4 million. Cloudflare’s adjusted gross margins also expanded to 78.9%, marking a YoY increase of about 90 bps. Moreover, analysts who initiated coverage on the company in mid-October, post the quiet period, have also been largely positive on the stock.
We ‘step back’ from these recent swings to review Cloudflare’s performance over the last few years, as a context for what might come next. Our Interactive dashboard, Why Has Cloudflare Stock Rallied In Recent Weeks? reviews the near term reasons and the big picture.
The context for the last few years:
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A closer look At Cloudflare’s Total Revenues over the last few years and the outlook
Total Revenues for Cloudflare increased from $135 million in 2017 to $193 million in 2018, marking an increase of 43%. This compares with Total Revenues growth of 59% in 2017. We expect Total Revenues growth to be 48% in 2019.
A closer look At Cloudflare’s Total Expenses over the last few years and the outlook
Total Expense for Cloudflare increased from $145 Mil in 2017 to about $279 Mil in 2018, an increase of 93%. This compares with Total Expense growth of 41% in 2017. We expect Total Expense growth to be 18.4% in 2019.
How has Cloudflare’s EBT trended?
EBT for Cloudflare decreased from -$9.7 million in 2017 to -$86 million in 2018, as Operating Expenses grew faster than Revenues. We expect EBT to increase to -$45 million in 2019
How has Cloudflare’s Net Income and EPS trended?
For more details on Cloudflare’s net income and EPS, view our interactive dashboard analysis.
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