Please ensure Javascript is enabled for purposes of website accessibility

Why Cloudflare Stock Jumped Today

By Evan Niu, CFA – May 7, 2021 at 12:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cybersecurity provider reports upbeat quarterly results and issues a rosy forecast.

What happened

Shares of Cloudflare (NET -4.61%) jumped as much as 13% today after the company reported strong first-quarter earnings results. They topped Wall Street's forecast, and guidance was also ahead of expectations. As of 12:15 p.m. EDT today, the stock had given back some of those gains and was up just 5%.

So what

Revenue in the first quarter came in at $138.1 million, compared to the consensus estimate of $131 million. That resulted in an adjusted net loss per share of $0.03, which is right on target with analyst expectations. The cybersecurity technology company said its dollar-based net retention rate, which measures spending from existing customers, hit a record 123%.

Stock chart going up

Image source: Getty Images.

"We crossed 4 million total customers, and our large customer count was up 70% year-over-year, accounting for more than half of our total revenue," CEO Matthew Prince said in a statement. "We delivered terrific financial results while also investing in innovation, the fuel our engine runs on."

Now what

Guidance for the second quarter calls for revenue in the range of $145.5 million to $146.5 million, which should translate into an adjusted net loss per share of $0.03 to $0.04. Wall Street is currently modeling for $139.1 million in sales and $0.03 per share in adjusted red ink.

Looking further out, Cloudflare said that full-year 2021 revenue is expected to be $612 million to $616 million, which is ahead of the consensus estimate of $592.8 million. Adjusted net loss per share this year is forecast at $0.10 to $0.11.

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Cloudflare, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Cloudflare, Inc. Stock Quote
Cloudflare, Inc.
$54.85 (-4.61%) $-2.65

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.