Cloudflare’s 2Q revenues jumped 48% to $99.7 million year-over-year and beat analysts’ expectations of $94.1 million thanks to strong growth in its paying customer base. The cloud networking and security solution provider’s paying user base increased 24% mainly driven by elevated demand for cloud-based solutions amid the coronavirus-led work-from-home wave.
Cloudflare (NET) posted a 2Q loss of $0.03 per share which was also narrower than the Street estimates of $0.06 and lower than the year-ago quarter’s loss of $0.22.
The company’s co-founder and CEO, Matthew Prince said, “We delivered a strong second quarter, with revenue growth up 48% year-over-year, and added a record number of both large and paying customers.” He further added, “It has been incredible to see the rate of innovation that has continued, and even accelerated, as we work remotely.
Ahead of its earnings, on August 4, RBC Capital analyst Matthew Hedberg raised the price target on the stock to $48 (16.1% upside potential) from $29 and maintained a Buy rating. Hedberg had anticipated a strong 2Q result and stated that “the company is well positioned post-COVID given its cloud-based platform that benefits from greater use of internet and remote work.”
Overall, NET has a Strong Buy analyst consensus. The average price target of $43.67 implies an upside potential of 5.6%. (See NET stock analysis on TipRanks)
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