Cloudflare is an online network operator. This multi-billion-dollar company offers website security, content delivery network services, web infrastructure, and domain name server services.
Lots of people turned to computers for work or entertainment, as they stayed home during the pandemic lockdowns. As a result, many internet stocks hit high. While there were some which suffered due to coronavirus, the majority of futures had a successful quarter.
The current business environment relies on the internet very much due to pandemic restrictions. More people work remotely from home, and businesses use teleconferencing to continue functioning. All of these factors have put Cloudflare’s products and services in high demand. Cloudflare reported that its revenues skyrocketed to $287 million last year.
Furthermore, Cloudflare’s total customer count reached 2.8 million as the company gained approximately 250,000 new customers in the quarter. As a result, the company’s revenues beat the forecast in the first quarter, rallying by 48% and reaching $91.3 million.
In the United States, sales grew by 44% year-over-year, and in Europe – by an even more impressive 58%. However, U.S. sales consist of 40% of the company’s total.
The company’s portfolio of products had gained traction in current conditions – noted JPM’s analyst Sterling Auty. Cloudflare may convert its free Teams offering over to a paid solution over the year. If that happens, it will generate additional revenue tailwinds.
How much do Cloudflare’s shares cost now?
Auty set his price target at $52, which implies a 48% one-year upside. According to the analyst, there is ample upside opportunity for the revenue results over the next several years to generate a significant free cash flow profile.
Cloudflare’s stock has already surpassed its average price target in recent trading. It is currently trading at $36.75. But considering Auty’s outlook, Wall Street’s analysts may have to readjust their targets. Currently, Cloudflare got a Moderate Buy rating from the analyst consensus, based on 8 Buys and 4 Holds.
