Shares of cloud-based network security specialist Cloudflare (NYSE:NET) are trading 17.6% higher at 3:10 p.m. EDT, just ahead of the company's first-quarter earnings report. The report is scheduled for publication just after the closing bell, either confirming or refuting the bullish industry signals that were sent by Cloudflare's sector rivals earlier this week.
The COVID-19 crisis has been good to some businesses, including email security expert Zix (NASDAQ:ZIXI), edge services specialist Fastly (NYSE:FSLY), and cybersecurity generalist Fortinet (NASDAQ:FTNT). All of these companies reported earnings this Wednesday evening and their shares are skyrocketing today. At press time, Fastly shares traded 47.7% higher while Fortinet sported a 22.3% return and Zixi's shares were up by 15%.
It's no surprise to see Cloudflare riding the coattails of several proven success stories in the same corner of the cloud security market. Social distancing is good news for cloud computing companies because remote work connections need protection from malicious network attacks and attempts to steal sensitive business data. That's what these companies do, and the market largely failed to see these robust earnings reports coming -- until the impressive filings actually started to drop in.
For the record, your average analyst expects Cloudflare to post a net loss of $0.06 per share on roughly $87 million in top-line sales tonight. General trends around the cloud-based security niche suggest that these targets could be much too conservative.