Despite Cloudflare’s Strong Revenue Forecast, Investors Are Unimpressed

(CTN News) – It was reported on Thursday that CloudFlare (NET) posted more than Wall Street expectations in terms of earnings and revenue for the first quarter, while guidance only met that mark. The stock fell on the news of its outlook.

Cloudflare announced after the close of the market that their earnings for the quarter ended March 31 came in at 16 cents, an increase of 100% from the same period last year.

During the quarter, the company reported an increase of 30% in sales to $378.6 million, according to its earnings report.

A profit of 13 cents per share was predicted by analysts, with revenue of $373.2 million and an adjusted profit of 13 cents per share.

The stock of Cloudflare is in line with guidance

According to Cloudflare, revenue is expected to reach $394 million for the current quarter ending in June, in line with estimates from analysts.

On Wednesday, Fastly (FSLY), a company that is a rival, released its earnings report and commented on how customers are feeling the squeeze on pricing.

As of today’s extended trading session, Cloudflare’s stock price fell more than 14% to 76.40, down over 14% from yesterday’s lows. It had gained 4% in 2024 prior to the release of earnings report, indicating that the stock was on the rise.

Additionally, Cloudflare stock possesses a Relative Strength Rating of 94 out of a best-possible 99 points, according to IBD Stock Checkup, indicating that the stock is performing well.

A cloud service provider that has been operating since 2009, Cloudflare is dedicated to accelerating and providing security for web applications routed through its intelligent global network.

A new web infrastructure has been added to the company to accommodate the fast emerging applications based on generative artificial intelligence.

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