Cloudflare soars after beating on revenue and raising annual forecast
Summary
Cloudflare shares jumped as much as 27% on Friday, after the content distribution network and security provider announced second-quarter results and full-year guidance that exceeded analysts predictions. "In Q1, our pipeline generation slowed, sales cycles extended, and customers took longer to pay their bills," Cloudflare CEO Matthew Prince told analysts on the earnings call. RBC analysts boosted their target and wrote in a note to clients that while no company is recession-proof, Cloudflare is better equipped than others to withstand economic pressure. Citigroup analysts maintained their hold rating and said the stock is "far more demanding on valuation levels relative to our profitable hyper-growth names" like CrowdStrike, Atlassian and Datadog. Prince said the company has changed its "go-to-market message" during the downturn and is focused on helping customers save money and consolidate "spend from multiple point solution vendors behind Cloudflares broad platform."
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