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Shares of Cloudflare (NYSE:NET) are up over 7% in pre-market Friday after the tech company reported better-than-expected Q4 numbers and offered solid guidance.
NET posted an EPS of $0.06 on revenue of $274.7 million, which compares to the average analyst estimate for earnings of $0.04 per share on revenue of $274.16M. The company reported 2,000 large customers at the end of Q4.
For this quarter, NET sees EPS in the range of $0.03-0.04, which may not compare to the consensus of $0.30. Revenue is seen between $290M and $291M, somewhere in line with the consensus of $291M.
For 2023, Cloudflare sees EPS between $0.15-0.16 on revenue of $1.33-1.34B, better than the consensus for earnings of $0.15 on sales of $1.31B.
Guggenheim analysts reiterated a Sell rating on the NET stock but raised the price target by $7 to $43 per share.
“While management repeatedly said that they viewed guidance as “prudent” given the difficult macro backdrop (which they are not assuming improves, nor do they see any improvement in sales productivity), we believe 2023 revenue guidance implies an unlikely material increase in new business signings from that seen in 2022. This significantly raises the risk profile of the stock, in our opinion,” analysts said in a note.
Mizuho analysts also raised the price target.
“We continue to believe that NET possesses highly scalable architecture and a culture of strong innovation. That said, on a relative basis, we believe NET’s valuation somewhat meaningfully discounts strong platform growth in the future,” the analysts wrote.
