Cloudflare co-founder and CEO Matthew Prince speaks on stage at TechCrunch Disrupt Berlin on December 12, 2019 in Berlin, Germany.
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Cloudflare Stocks surged as much as 27% on Friday, after content delivery networks and security providers announced Second-quarter results and full-year guidance exceeded analyst expectations.
Revenue grew 54% from a year earlier to $234.5 million, maintaining growth from three months ago, despite slowdowns in other parts of the tech industry. Analysts expect revenue of $227.3 million, according to Refinitiv.
The company says it has added a record number of customers paying over $100,000 per year, and management has increased its forecast for 2022, calling for growth of about 48%.
“In Q1, our pipeline growth slowed, sales cycles lengthened, and customers took longer to pay their bills,” Cloudflare CEO Matthew Prince told analysts. earnings call analysis. “We’ve been closely monitoring those metrics throughout Q2 and have found that they’ve at least stabilized. They’re not yet where we’ve launched a parade, but the indicators are trending in the right direction. direction.”
The results have led some analysts to raise their stock price targets. RBC analysts stepped up their goals, writing in a note to clients that while no company has weathered the downturn, Cloudflare is better equipped than others to withstand it. economic pressure.
Cloudflare is one of a number of cloud software companies showing growing appeal to investors, who turned out of the field in the first half of the year. Together with Cloudflare, Payment Allocation and ZoomInfo also up more than 25% so far in August.
Analysts polled by FactSet currently have an average price target of about $92 per share. This is much lower than Cloudflare’s record $217.25 from November, but up from its current price of around $73.
Not all analysts are so optimistic. Citigroup analysts maintained their holding ratings and said the stock is “much more demanding in terms of valuation than our ultra-margin growth names” like CrowdStrike, Atlassian and Datadog.
Even as revenue grew, Cloudflare’s net loss grew to nearly $64 million from $35 million in Q1 the previous year. Prince said the company changed its “go-to-market message” during the downturn and focused on helping customers save money and bolstering “spending from the multipoint solution providers behind the platform.” Cloudflare’s vast platform.”
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