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

Cloudflare (NET) closed at $90.59 in the latest trading session, marking a -0.17% move from the prior day. This change lagged the S&P 500's daily gain of 0.21%. At the same time, the Dow added 0.19%, and the tech-heavy Nasdaq gained 0.11%.

Prior to today's trading, shares of the web security and content delivery company had lost 30.21% over the past month. This has lagged the Computer and Technology sector's loss of 13.55% and the S&P 500's loss of 8.08% in that time.

Wall Street will be looking for positivity from Cloudflare as it approaches its next earnings report date. This is expected to be May 5, 2022. On that day, Cloudflare is projected to report earnings of $0 per share, which would represent year-over-year growth of 100%. Meanwhile, our latest consensus estimate is calling for revenue of $205.74 million, up 49.02% from the prior-year quarter.

NET's full-year Zacks Consensus Estimates are calling for earnings of $0.03 per share and revenue of $930.56 million. These results would represent year-over-year changes of +160% and +41.76%, respectively.

Investors might also notice recent changes to analyst estimates for Cloudflare. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Cloudflare currently has a Zacks Rank of #3 (Hold).

In terms of valuation, Cloudflare is currently trading at a Forward P/E ratio of 3024.67. Its industry sports an average Forward P/E of 52.19, so we one might conclude that Cloudflare is trading at a premium comparatively.

Meanwhile, NET's PEG ratio is currently 120.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Internet - Software industry currently had an average PEG ratio of 2.76 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 173, putting it in the bottom 32% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.