Information technology stock Cloudflare (NASDAQ:NET) got a nice recovery going today after showing off its second quarter earnings, and offering up some solid guidance for the third quarter as well. The news was enough to bring some analysts back around, and Cloudflare added over 8% in Friday afternoon’s trading as a result.
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The word out of Robert W. Baird, via analyst Shrenik Kothari, noted that Cloudflare was “back to familiar territory,” demonstrating an “optimistic tone” with its earnings, and seeing the overall environment start to stabilize as well. While Kothari considers Cloudflare’s guidance to be “conservative”, even in the presence of no serious improvements in the overall macroeconomic environment, it should still pick up nicely in the rest of the second half.
Cloudflare’s second quarter numbers looked great as well, with its earnings of $0.10 beating the $0.07 analysts looked for. Revenue offered a similar win, with its $308.5 million winning out against projections of $305.82, and also representing a surge of 31.6% higher than the second quarter of 2022 could muster. However, the news isn’t all good for Cloudflare. In the Memri Daily Brief, two researchers called for the U.S government to stop using Cloudflare services entirely. Apparently Memri itself had already cut ties, and now, Memri beseeched the U.S to follow suit. More specifically, Memri asserted that Cloudflare “…continues to serve extremists and terrorists…,” a hefty charge indeed.
Analysts, however, are quite in favor of Cloudflare’s chances going forward. With eight Buy ratings, eight Hold and two Sell, Cloudflare stock is considered a Moderate Buy. However, with today’s pricing action, Cloudflare now comes with a slight downside risk of 0.64% thanks to its average price target of $69.41.
