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Analysts Have Made A Financial Statement On Cloudflare, Inc.'s (NYSE:NET) Third-Quarter Report
Last week saw the newest third-quarter earnings release from Cloudflare, Inc. (NYSE:NET), an important milestone in the company's journey to build a stronger business. Revenues of US$783m beat expectations by a respectable 5.8%, although statutory losses per share increased. Cloudflare lost US$0.10, which was 3,702% more than what the analysts had included in their models. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Following the latest results, Cloudflare's 30 analysts are now forecasting revenues of US$3.89b in 2027. This would be a sizeable 42% improvement in revenue compared to the last 12 months. Cloudflare is also expected to turn profitable, with statutory earnings of US$0.014 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$3.70b and earnings per share (EPS) of US$0.064 in 2027. So it's pretty clear the analysts have mixed opinions on Cloudflare after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.
Check out our latest analysis for Cloudflare
There's been no major changes to the price target of US$341, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Cloudflare at US$430 per share, while the most bearish prices it at US$165. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 33% growth on an annualised basis. That is in line with its 27% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So it's pretty clear that Cloudflare is forecast to grow substantially faster than its industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Cloudflare. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$341, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Cloudflare going out to 2028, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Cloudflare , and understanding it should be part of your investment process.
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