Yahoo Finance Cloudflare (NET) to Report Q4 Earnings: What's in the Cards?
Cloudflare NET is scheduled to report its fourth-quarter 2022 results on Feb 9.
The company projects fourth-quarter revenues in the band of $273.5-$274.5 million. The Zacks Consensus Estimate for the top line is currently pegged at $274.3 million, indicating an improvement of 41.7% year over year.
Cloudflare expects non-GAAP earnings per share between 4 cents and 5 cents. The consensus mark for the same stands at 4 cents per share, implying a robust improvement from the year-ago quarter’s breakeven earnings.
The web infrastructure and website security solution provider projects non-GAAP income from operations between $12 million and $13 million. Cloudflare’s earnings beat the Zacks Consensus Estimate in all the trailing four quarters, the average surprise being 100%.
Let’s see how things have shaped up before the upcoming announcement.
Cloudflare, Inc. Price and EPS Surprise
Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. Quote
Factors to Note Ahead of Q4 Earnings
Cloudflare’s fourth-quarter performance is likely to have benefited from the solid demand for security solutions, which became imperative due to aggravated cyberattacks, work-and-learn-from-home policies and a zero-trust approach.
The to-be-reported quarter’s top line is likely to have witnessed the impact of the accelerated global footprint expansion outside the United States. It is worth mentioning that the United States, the EMEA and the APAC represented 53%, 27% and 13% of the total revenues, respectively, in the third quarter.
Moreover, a diversified customer base is likely to have contributed to NET’s fourth-quarter top line. It added around 4,197 new paying customers in the last reported quarter, bringing the total count to approximately 156,000 across more than 170 countries.
Cloudflare added 159 new large customers (annual billings of more than $100,000), taking the total count to 1,908 at the end of the third quarter, up from the 1,749 recorded at the end of the second quarter of 2022. This uptrend, which has prevailed for the past few quarters, is likely to have continued in the to-be-reported quarter as well, backed by the elevated demand for its cloud-based solutions amid the ongoing remote-working trend.
The company's recurring subscription-based business model has been providing relative stability to its top line amid post-pandemic disruptions. It expects variability in cash flow margins due to working capital fluctuations, large enterprise business growth and seasonal factors.
However, Cloudflare’s significant exposure to small and medium businesses, the worst-hit cohorts by the pandemic and ongoing geopolitical uncertainties worldwide, is likely to have weighed on its performance in the quarter to be reported.
What Our Model Unveils
Our proven model does not conclusively predict an earnings beat for NET this season. The combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.
Though Cloudflare currently carries a Zacks Rank of #3, it has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks With the Favorable Combination
Per our model, Analog Devices ADI, Check Point Software CHKP and Cisco Systems CSCO have the right combination of elements to post an earnings beat in their upcoming releases.
Analog Devices is slated to report first-quarter fiscal 2023 results on Feb 15. The company has a Zacks Rank #3 and an Earnings ESP of +1.13% at present. ADI’s earnings beat the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 7.8%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.59 per share, suggesting an increase of 33.5% from the year-ago quarter’s earnings of $1.94. Analog Devices’ quarterly revenues are estimated to increase 17.3% year over year to $3.15 billion.
Check Point carries a Zacks Rank #3 and has an Earnings ESP of +1.22%. The company is scheduled to report fourth-quarter 2022 results on Feb 13. Its earnings beat the Zacks Consensus Estimate in the preceding four quarters, the average surprise being 3.6%.
The Zacks Consensus Estimate for Check Point’s fourth-quarter earnings stands at $2.35 per share, implying a year-over-year increase of 4.4%. It is estimated to report revenues of $633.6 million, which suggests growth of 5.8% from the year-ago quarter.
Cisco carries a Zacks Rank #3 and has an Earnings ESP of +1.66%. The company is slated to report second-quarter fiscal 2023 results on Feb 15. Its earnings surpassed the Zacks Consensus Estimate in the trailing four quarters, the average surprise being 2.1%.
The Zacks Consensus Estimate for CSCO’s fiscal second-quarter earnings is pegged at 86 per share, indicating a year-over-year increase of 2.4%. The consensus mark for revenues stands at $13.43 billion, suggesting a year-over-year increase of 5.6%.
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Analog Devices, Inc. (ADI) : Free Stock Analysis Report
Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report
Check Point Software Technologies Ltd. (CHKP) : Free Stock Analysis Report
Cloudflare, Inc. (NET) : Free Stock Analysis Report
