Cloudflare Gets A Break: Analyst Upgrades Stock Amid Positive Q1 Results

Guggenheim Securities analyst John DiFucci upgraded Cloudflare Inc NET to Neutral from Sell.
The analyst is bullish on the company's potential and management's vision and thinks the company's 2023 expectations were 'exceedingly too high' amid a weak economy. The upgrade was also in response to a 32% drop in the company's shares (to the analyst's lowered price target of $40) post reporting Q1 2023 earnings results last week.
The company's Q1 2023 revenues of $290 million were broadly in line with the consensus, and adjusted EPS of $0.08 surpassed the consensus of $0.03.
NET guided Q2 2023 revenues of $305.0 million-$306.0 million and adjusted EPS of $0.07 to $0.08.
The company lowered 2023 revenues forecast to $1.280 billion-$1.284 billion and currently sees adjusted EPS of $0.34-$0.35. DiFucci expects 2023 revenues of $1.283 billion and adjusted EPS of $0.34.
The analyst expects the macro environment to improve in H2 2023 and higher cross-selling of other Cloudflare products and solutions to the existing customers.
Price Action: NET shares are trading higher by 8.63% at $43.97 on the last check Friday.

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