Cloudflare Analysts Cut Their Forecasts After Q1 Results

Cloudflare, Inc. NET reported upbeat earnings for its first quarter and issued FY24 revenue guidance below estimates on Thursday.

Cloudflare reported quarterly earnings of 16 cents per share, which beat the analyst consensus estimate of 13 cents by 23.08%. The company closed quarterly sales of $378.6 million, which beat the analyst consensus estimate of $373.09 million. It represents a 30.47% growth from the prior year’s period, according to data from Benzinga Pro.

“The first quarter marked a strong start to the year, as we grew revenue 30% year-over-year to $378.6 million—fueled by a record number of net-new customers year-over-year spending more than $100,000, $500,000, and $1 million with Cloudflare on an annualized basis. I’m incredibly proud of the fact that our team has been able to continue to build our network, service larger and larger customers, and launch entirely new categories of products—including in the AI space—while also remaining disciplined with our gross and operating margins and our free cash flow,” said Matthew Prince, CEO of Cloudflare.

Cloudflare said it sees second-quarter revenue between $393.5 million and $394.5 million, versus the $393.4 million estimate, and adjusted earnings of approximately 14 cents per share versus the 13 cents estimate.

The company expects full-year 2024 revenue between $1.648 billion and $1.652 billion, versus the $1.653 billion estimate, and adjusted earnings between 60 cents and 61 cents per share, versus the 60 cent estimate.

Cloudflare shares fell 12.3% to trade at $78.00 on Friday.

These analysts made changes to their price targets on Cloudflare following earnings announcement.

• Baird cut the price target on Cloudflare from $100 to $94. Baird analyst Shrenik Kothari maintained an Outperform rating.
• Mizuho slashed the price target on Cloudflare from $95 to $88. Mizuho analyst Gregg Moskowitz maintained a Neutral rating.
• Oppenheimer lowered the price target on Cloudflare from $122 to $110. Oppenheimer analyst Shaul Eyal maintained an Outperform rating.
• Piper Sandler cut the price target on Cloudflare from $110 to $81. Piper Sandler analyst James Fish reiterated Cloudflare with a Neutral.

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