Cloudflare Stock Rises Sharply as Full-Year Revenue Forecast Is Raised

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Cloudflare expects full-year revenue of $968 million to $972 million.

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Michael Short/Bloomberg

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Cloudflare shares surged nearly 20% in premarket trading Friday after the web security provider raised its full-year revenue guidance.

Cloudflare (ticker: NET) said it expects full-year revenue of $968 million to $972 million, above its previous projections of $955 million to $959 million. Analysts surveyed by FactSet forecast full-year sales of $958.4 million.

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The company said it expects adjusted earnings for the year of 3 cents to 4 cents a share, in line with its previous estimate.

Cloudflare shares jumped 19.5% in premarket trading Friday to $69.83.

The company reported a break-even second quarter on an adjusted basis, compared with a year-earlier loss of 2 cents. Revenue rose 54% to $234.5 million.

Analysts surveyed by FactSet had called for a loss in the second quarter of 1 cent a share on revenue of $227.3 million.

RBC Capital Markets analyst Matthew Hedberg, who maintained an Outperform rating on the stock but raised his price target to $74 from $62, said the company’s second-quarter revenue jump “showed no deceleration q/q despite a difficult macro environment.

“Enterprise demand again drove much of the strength with record new large customer additions and record gross renewal rate in all regions,” the analyst added.

Amit Daryanani of Evercore ISI said Cloudflare “continues to deliver impressive fundamental results” but added the stock could “struggle to maintain the outperformance in the near-term unless the interest rate environment becomes more favorable.”

Daryanani has an Outperform rating on the stock and a price target of $80.

Write to Joe Woelfel at [email protected]

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Credit: www.marketwatch.com /

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