Cloudflare Shares Snap Six-Day Gain Amid Analyst Caution
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 39 minutes ago
0mins
Source: seekingalpha
- Stock Fluctuation: Cloudflare (NET) shares fell 3.1% on Wednesday to $210.75, snapping a six-day gain where the stock rose nearly 8%, indicating market caution regarding its short-term performance.
- Year-to-Date Performance: So far this year, Cloudflare's stock has increased about 7%, which is slightly below the S&P 500's 10% rise, reflecting its relative weakness in the broader market context.
- Analyst Ratings: According to Seeking Alpha's Quant Rating, Cloudflare holds a 3.4 out of 5 Hold rating, with an A- for profitability prospects but an F for valuation, highlighting analysts' concerns about its current valuation metrics.
- Market Outlook: Despite headwinds in the cybersecurity sector, Cloudflare's net retention rates have improved significantly year-over-year, and analysts believe the company is well-positioned for the next market rally phase, driven by AI-enabled operational efficiency and earnings growth.
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Analyst Views on NET
Wall Street analysts forecast NET stock price to rise
25 Analyst Rating
15 Buy
10 Hold
0 Sell
Moderate Buy
Current: 217.540
Low
131.00
Averages
253.24
High
318.00
Current: 217.540
Low
131.00
Averages
253.24
High
318.00
About NET
Cloudflare, Inc. is a connectivity cloud company. The Company delivers a range of services to businesses of all sizes and in all geographies, enhancing the performance of business-critical applications. Its full suite of products consists of application services that help deliver security, performance, and reliability for any organization's applications connected to the Internet, including Websites and application programming interfaces (APIs) and its secure access service edge (SASE) platform, which contains its suite of and workplace security services and network services solutions to help ensure traffic in and out of an organization’s network and devices is verified and authorized and data is protected and secured, as well as to securely connect data centers, cloud services, and branch offices to an organization with its connectivity cloud. The Company also offers developer-based solutions which build and deploys serverless and artificial intelligence applications.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Cloudflare Shares Snap Six-Day Gain Amid Analyst Caution
- Stock Fluctuation: Cloudflare (NET) shares fell 3.1% on Wednesday to $210.75, snapping a six-day gain where the stock rose nearly 8%, indicating market caution regarding its short-term performance.
- Year-to-Date Performance: So far this year, Cloudflare's stock has increased about 7%, which is slightly below the S&P 500's 10% rise, reflecting its relative weakness in the broader market context.
- Analyst Ratings: According to Seeking Alpha's Quant Rating, Cloudflare holds a 3.4 out of 5 Hold rating, with an A- for profitability prospects but an F for valuation, highlighting analysts' concerns about its current valuation metrics.
- Market Outlook: Despite headwinds in the cybersecurity sector, Cloudflare's net retention rates have improved significantly year-over-year, and analysts believe the company is well-positioned for the next market rally phase, driven by AI-enabled operational efficiency and earnings growth.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Divergent Market Performance: The S&P 500 index fell by 0.07% while the Dow Jones Industrial Average rose by 0.54%, indicating a divergence in market trends, particularly with the Dow reaching a new high, reflecting increased investor confidence in certain sectors.
- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Market Divergence: The S&P 500 index fell by 0.05%, while the Dow Jones Industrial Average rose by 0.23%, and the Nasdaq 100 index decreased by 0.15%, indicating a divergence in market performance, particularly under the pressure of weak energy and cybersecurity stocks.
- Crude Oil Price Decline: Crude oil prices dropped over 4% to a five-week low amid optimism surrounding a US-Iran peace deal, which has lowered inflation expectations and pushed bond yields lower, with the 10-year T-note yield falling to a 1.5-week low of 4.45%.
- Mortgage Application Decrease: For the week ending May 22, US MBA mortgage applications fell by 8.5%, with the purchase mortgage sub-index down 0.4% and the refinancing mortgage sub-index down 18.1%, indicating the suppressive effect of high rates on the housing market.
- Earnings Performance: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with Q1 earnings projected to rise by 12% year-over-year, but excluding the technology sector, earnings growth is only about 3%, marking the lowest in two years, reflecting disparities across industries.
See More
Palihapitiya Critiques Cloudflare's Layoff Memo
- Memo Controversy: Palihapitiya criticized Cloudflare CEO Prince's layoff memo for labeling employees as 'measurers,' arguing that this approach not only fails to assist laid-off workers in job searches but also risks damaging the company's reputation.
- Significant Workforce Reduction: Cloudflare cut over 20% of its workforce, laying off more than 1,100 employees globally just two weeks ago, indicating a strong commitment to redefining its operational model in the AI era, although this move is not merely a cost-cutting exercise.
- AI's Impact on Workforce: Prince highlighted that advancements in AI pose a greater risk to 'measurers,' leading to the reduction of middle management, which reflects the company's increasing reliance on AI technology for operational efficiency.
- Market Sentiment: Despite Cloudflare's stock rising 12% year-to-date, investor sentiment on social media platforms has turned bearish, indicating concerns about the company's future growth prospects.
See More
Intuit Cuts 17% Workforce Amid AI Challenges
- Layoff Announcement: Intuit has announced a 17% workforce reduction affecting over 3,000 employees, based on its last reported headcount of 18,200, with restructuring charges expected to range from $300 million to $340 million, primarily impacting the current quarter, reflecting the company's strategic response to the challenges posed by AI.
- Earnings Report: In its latest earnings report, Intuit posted adjusted earnings per share of $12.80 on $8.56 billion in revenue for the fiscal third quarter, with a 10% year-over-year revenue growth marking the slowest expansion rate since 2024, indicating investor concerns about its future performance amid a broader software market downturn.
- Future Guidance: Intuit raised its fiscal 2026 earnings forecast, now expecting adjusted earnings per share between $23.80 and $23.85, with revenue projected at $21.34 billion to $21.37 billion, surpassing analyst expectations, which reflects the company's confidence in its growth trajectory despite current challenges.
- Organizational Restructuring: The company plans to streamline its management layers and close offices in Reno, Nevada, and Woodland Hills, California, to enhance team collaboration, while integrating TurboTax and Credit Karma to eliminate redundant roles, aiming to improve operational efficiency and strengthen its competitive position in the market.
See More
Intuit Cuts 17% Workforce to Enhance Efficiency Amid AI Concerns
- Layoff Announcement: Intuit plans to cut 17% of its full-time workforce, affecting over 3,000 employees, aiming to enhance operational efficiency in response to market challenges posed by AI, with restructuring costs expected to range from $300 million to $340 million, primarily recognized in the current quarter.
- Earnings Report: In its latest earnings report, Intuit reported adjusted earnings per share of $12.80 and revenue of $8.56 billion, with a 10% year-over-year revenue growth, marking the slowest expansion rate since 2024, indicating increasing competitive pressures in the market.
- Stock Price Reaction: Following the layoff announcement, Intuit's stock fell 11% in after-hours trading, with shares down over 40% this year, contrasting sharply with the S&P 500's 8% gain, reflecting investor concerns about the company's future prospects.
- Future Guidance: Despite the challenges, Intuit raised its fiscal 2026 earnings forecast, expecting adjusted earnings per share between $23.80 and $23.85, with revenue projected between $21.34 billion and $21.37 billion, demonstrating the company's confidence in long-term growth.
See More
Cloudflare Shares Snap Six-Day Gain Amid Analyst Caution
- Stock Fluctuation: Cloudflare (NET) shares fell 3.1% on Wednesday to $210.75, snapping a six-day gain where the stock rose nearly 8%, indicating market caution regarding its short-term performance.
- Year-to-Date Performance: So far this year, Cloudflare's stock has increased about 7%, which is slightly below the S&P 500's 10% rise, reflecting its relative weakness in the broader market context.
- Analyst Ratings: According to Seeking Alpha's Quant Rating, Cloudflare holds a 3.4 out of 5 Hold rating, with an A- for profitability prospects but an F for valuation, highlighting analysts' concerns about its current valuation metrics.
- Market Outlook: Despite headwinds in the cybersecurity sector, Cloudflare's net retention rates have improved significantly year-over-year, and analysts believe the company is well-positioned for the next market rally phase, driven by AI-enabled operational efficiency and earnings growth.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Divergent Market Performance: The S&P 500 index fell by 0.07% while the Dow Jones Industrial Average rose by 0.54%, indicating a divergence in market trends, particularly with the Dow reaching a new high, reflecting increased investor confidence in certain sectors.
- Impact of Falling Oil Prices: Crude oil prices dropped over 3% amid optimism for a normalization of oil flows from the Middle East, which not only eased inflation expectations but also pushed the 10-year Treasury yield down to a 1.5-week low of 4.45%, positively affecting the bond market.
- Decline in Mortgage Applications: US MBA mortgage applications fell by 8.5% for the week ending May 22, with the purchase mortgage sub-index down 0.4% and the refinancing sub-index plunging 18.1%, indicating the suppressive effect of high interest rates on the housing market.
- Corporate Earnings Overview: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with overall earnings projected to rise by 12% year-on-year, but excluding the tech sector, the growth is only 3%, highlighting disparities across industries.
See More
Mixed US Stock Market with Energy Stocks Under Pressure
- Market Divergence: The S&P 500 index fell by 0.05%, while the Dow Jones Industrial Average rose by 0.23%, and the Nasdaq 100 index decreased by 0.15%, indicating a divergence in market performance, particularly under the pressure of weak energy and cybersecurity stocks.
- Crude Oil Price Decline: Crude oil prices dropped over 4% to a five-week low amid optimism surrounding a US-Iran peace deal, which has lowered inflation expectations and pushed bond yields lower, with the 10-year T-note yield falling to a 1.5-week low of 4.45%.
- Mortgage Application Decrease: For the week ending May 22, US MBA mortgage applications fell by 8.5%, with the purchase mortgage sub-index down 0.4% and the refinancing mortgage sub-index down 18.1%, indicating the suppressive effect of high rates on the housing market.
- Earnings Performance: As of now, 83% of the 475 S&P 500 companies that reported Q1 earnings have exceeded expectations, with Q1 earnings projected to rise by 12% year-over-year, but excluding the technology sector, earnings growth is only about 3%, marking the lowest in two years, reflecting disparities across industries.
See More
Palihapitiya Critiques Cloudflare's Layoff Memo
- Memo Controversy: Palihapitiya criticized Cloudflare CEO Prince's layoff memo for labeling employees as 'measurers,' arguing that this approach not only fails to assist laid-off workers in job searches but also risks damaging the company's reputation.
- Significant Workforce Reduction: Cloudflare cut over 20% of its workforce, laying off more than 1,100 employees globally just two weeks ago, indicating a strong commitment to redefining its operational model in the AI era, although this move is not merely a cost-cutting exercise.
- AI's Impact on Workforce: Prince highlighted that advancements in AI pose a greater risk to 'measurers,' leading to the reduction of middle management, which reflects the company's increasing reliance on AI technology for operational efficiency.
- Market Sentiment: Despite Cloudflare's stock rising 12% year-to-date, investor sentiment on social media platforms has turned bearish, indicating concerns about the company's future growth prospects.
See More
Intuit Cuts 17% Workforce Amid AI Challenges
- Layoff Announcement: Intuit has announced a 17% workforce reduction affecting over 3,000 employees, based on its last reported headcount of 18,200, with restructuring charges expected to range from $300 million to $340 million, primarily impacting the current quarter, reflecting the company's strategic response to the challenges posed by AI.
- Earnings Report: In its latest earnings report, Intuit posted adjusted earnings per share of $12.80 on $8.56 billion in revenue for the fiscal third quarter, with a 10% year-over-year revenue growth marking the slowest expansion rate since 2024, indicating investor concerns about its future performance amid a broader software market downturn.
- Future Guidance: Intuit raised its fiscal 2026 earnings forecast, now expecting adjusted earnings per share between $23.80 and $23.85, with revenue projected at $21.34 billion to $21.37 billion, surpassing analyst expectations, which reflects the company's confidence in its growth trajectory despite current challenges.
- Organizational Restructuring: The company plans to streamline its management layers and close offices in Reno, Nevada, and Woodland Hills, California, to enhance team collaboration, while integrating TurboTax and Credit Karma to eliminate redundant roles, aiming to improve operational efficiency and strengthen its competitive position in the market.
See More
Intuit Cuts 17% Workforce to Enhance Efficiency Amid AI Concerns
- Layoff Announcement: Intuit plans to cut 17% of its full-time workforce, affecting over 3,000 employees, aiming to enhance operational efficiency in response to market challenges posed by AI, with restructuring costs expected to range from $300 million to $340 million, primarily recognized in the current quarter.
- Earnings Report: In its latest earnings report, Intuit reported adjusted earnings per share of $12.80 and revenue of $8.56 billion, with a 10% year-over-year revenue growth, marking the slowest expansion rate since 2024, indicating increasing competitive pressures in the market.
- Stock Price Reaction: Following the layoff announcement, Intuit's stock fell 11% in after-hours trading, with shares down over 40% this year, contrasting sharply with the S&P 500's 8% gain, reflecting investor concerns about the company's future prospects.
- Future Guidance: Despite the challenges, Intuit raised its fiscal 2026 earnings forecast, expecting adjusted earnings per share between $23.80 and $23.85, with revenue projected between $21.34 billion and $21.37 billion, demonstrating the company's confidence in long-term growth.
See More
