Cloudflare Inc. NET is scheduled to report fourth-quarter 2024 results on Feb. 6.
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Cloudflare expects fourth-quarter revenues to be in the band of $451-$452 million. The Zacks Consensus Estimate for the top line is pegged at $451.8 million, which indicates a year-over-year improvement of 24.7%.
Cloudflare expects non-GAAP earnings of 18 cents per share for the to-be-reported quarter. The consensus mark for earnings is pegged at 18 cents per share, which remained unchanged over the past 60 days. This figure implies an improvement of 20% from the year-ago quarter’s reported figure.
Cloudflare’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 25.5%.
Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote
Factors to Influence Cloudflare’s Q4 Results
Cloudflare’s fourth-quarter performance is likely to have gained from organizations transitioning from traditional firewall and VPN-based cybersecurity solutions to the zero-trust approach. The company’s performance is expected to have benefited from the growing hybrid working trend, which needs organizations to secure networks beyond on-premise.
The top line is expected to have gained from accelerated global expansion outside the United States. It is worth mentioning that the company generated approximately 50% of its third-quarter 2024 revenues outside the United States.
A diversified clientele is likely to have boosted Cloudflare’s fourth-quarter top line. NET added around 11,340 new paying customers in the third quarter of 2024, bringing the total count to approximately 221,540.
The company also added 219 new large customers (annual billings of more than $100,000), taking the total count to 3,265 at the end of the third quarter. This rise in the customer base has prevailed for the past 13 quarters. This is expected to have continued in the to-be-reported quarter as well, backed by the increasing demand for NET’s cloud-based offerings amid the continuing digitalization trend.
Cloudflare’s recurring subscription-based business model has been providing relative stability to its top line amid the ongoing macroeconomic uncertainties and geopolitical issues.
Earnings Whispers for NET
Our proven model does not conclusively predict an earnings beat for Cloudflare this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here.
Though NET carries a Zacks Rank #2, it has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Stocks to Consider
Here are some stocks worth considering, as our model shows that these have the right combination of elements to beat on earnings this reporting cycle.
Lumentum Holdings Inc. LITE has an Earnings ESP of +17.01% and carries a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
It is set to report second-quarter fiscal 2025 results on Feb. 6. The Zacks Consensus Estimate for LITE’s second-quarter earnings per share (EPS) is pegged at 37 cents, up by a penny over the past 30 days. LITE shares have risen 55.5% over the past year.
DoorDash, Inc. DASH has an Earnings ESP of +22.50% and carries a Zacks Rank #2 at present.
It is set to report fourth-quarter 2024 results on Feb. 11. The Zacks Consensus Estimate for DASH’s fourth-quarter earnings is pegged at 34 cents per share, down by a penny over the past seven days, indicating a rise of 187.2% from the year-ago quarter’s reported figure. DASH shares have surged 76.6% over the past year.
CyberArk Software Ltd. CYBR has an Earnings ESP of +2.71% and carries a Zacks Rank #3 at present.
It is set to report fourth-quarter 2024 results on Feb. 13. The Zacks Consensus Estimate for CYBR’s fourth-quarter earnings is pegged at 71 cents per share, up by a penny over the past 60 days, indicating a fall of 12.4% from the year-ago quarter’s reported figure. CYBR shares have gained 56.9% over the past year.
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CyberArk Software Ltd. (CYBR) : Free Stock Analysis Report
Lumentum Holdings Inc. (LITE) : Free Stock Analysis Report
Cloudflare, Inc. (NET) : Free Stock Analysis Report
DoorDash, Inc. (DASH) : Free Stock Analysis Report
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