Cloudflare Set to Report Q3 Earnings: Buy, Sell or Hold the Stock?

Cloudflare NET is scheduled to report third-quarter 2024 results on Nov. 7.NET projects third-quarter revenues in the band of $423-$424 million. The Zacks Consensus Estimate for the top line is pegged at $423.7 million, which indicates a year-over-year improvement of 26.2%.Cloudflare expects non-GAAP earnings of 18 cents per share for the to-be-reported quarter. The consensus mark for earnings is pegged at 18 cents per share, unchanged over the past 60 days. This figure implies an improvement of 12.5% from the year-ago quarter’s reported figure.Cloudflare’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with the average surprise being 37.7%.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Factors to Consider for NETCloudflare’s third-quarter 2024 performance is likely to have benefited from organizations shifting from traditional firewall and VPN-based cybersecurity solutions to the effective zero-trust approach. The sustained momentum with the onboarding of large new customers, significant progress in the public sector, and continued high prioritization of security by its customers is expected to aid NET’s results in the quarter under review.Cloudflare’s top line is likely to have been aided by its expanding footprint outside the United States. It is worth mentioning that NET generated approximately 57% of its second-quarter 2024 revenues outside the United States. Cloudflare, Inc. Price and EPS Surprise Cloudflare, Inc. price-eps-surprise | Cloudflare, Inc. QuoteA robust clientele is likely to have boosted NET’s third-quarter revenues. As of August 2024, it had 3,046 large customers (contributing more than $100,000 in annualized revenue each).Strength in its AI platform, along with new technological innovations through strategic collaborations, is expected to have driven its third-quarter results. Cloudflare’s recent introduction of the application of AI Audit and Workers AI is likely to have boosted third-quarter performance. AI Audit facilitates website and content creators with the ability to easily comprehend how AI model providers are using their content for the first time whereas Workers AI features essential AI building blocks that enable developers to create faster and more powerful applications.However, Cloudflare’s third-quarter 2024 results might be hurt by softening IT spending as enterprises postpone large tech investments due to macroeconomic uncertainties and geopolitical issues. Cloudflare’s exposure to small and medium-sized business and mid-market segments, which may face more pressure than enterprise segments in challenging economic conditions is expected to hurt its third-quarter results.What Our Proven Model SaysAccording to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.Cloudflare has an Earnings ESP of 0.00% and carries a Zacks Rank #3 at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks to ConsiderHere are some stocks worth considering, as our model shows that they have the right combination of elements to beat on earnings this reporting cycle.Shopify SHOP has an Earnings ESP of +5.78% and sports a Zacks Rank #1 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.SHOP’s shares have gained 0.7% year to date. It is set to report third-quarter 2024 results on Nov. 12.The Zacks Consensus Estimate for SHOP’s third-quarter 2024 earnings is pegged at 27 cents per share, unchanged over the past 60 days, indicating an improvement of 12.5% from the year-ago quarter’s reported figure.Arista Networks ANET has an Earnings ESP of +0.72% and carries a Zacks Rank #2 at present. Arista Networks’ shares have surged 67.7% year to date. It is slated to report its third-quarter 2024 results on Nov. 7.The Zacks Consensus Estimate for ANET’s third-quarter 2024 earnings is pegged at $2.09 per share, up by a penny over the past 60 days. This suggests an improvement of 14.2% from the year-ago quarter’s reported figure.Bilibili BILI has an Earnings ESP of +10.00% and carries Zacks Rank #2 at present.BILI shares have surged 80.8% year to date. It is slated to release third-quarter 2024 results on Nov. 14.The Zacks Consensus Estimate for BILI’s earnings is pegged at 10 cents per share, up by a penny over the past 60 days. This indicates a rise of 134.5% from the year-ago quarter’s reported figure.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Arista Networks, Inc. (ANET): Free Stock Analysis Report Shopify Inc. (SHOP): Free Stock Analysis Report Bilibili Inc. Sponsored ADR (BILI): Free Stock Analysis Report Cloudflare, Inc. (NET): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks