Cloudflare Could Reach $800 Million Revenue in Q4, Analyst Says

BTIG analyst Gray Powell raised the price forecast for Cloudflare (NYSE:NET) from $382 to $413, while maintaining a Buy rating. The analyst cited stronger growth and product momentum at the company. The analyst wrote that they spoke with several Cloudflare contacts and industry analysts, including three partners and four industry analysts. Feedback was broadly positive. • Cloudflare stock is under selling pressure. Why are NET shares declining? Strong YTD Growth Projection The largest partner reported 40%-50% year-to-date growth, accelerating to the high 70% range in September, versus 40% previously. Another contact reported about 26% growth over the past three to four quarters and expects 28% growth by the fourth quarter. A European distributor expanded its Cloudflare agreement and said the company is gaining market share and strengthening its enterprise presence. Read Also: Cloudflare Taps Deutsche Telekom’s Enterprise Muscle in European Expansion The only cautious view came from a Secure Access Service Edge (SASE) analyst, who cited challenges in moving upmarket due to Cloudflare’s historical focus on smaller customers and cloud-only model. Street Expects Double-Digit Growth The Street expects fiscal third-quarter revenue of $737 million, up 31.1% year over year, while the analyst sees upside to $760 million, or 35.2% growth. Under that scenario, the fourth quarter revenue could reach about $800 million, up 30.2%, versus the $796 million Street estimate, adds the analyst. See More: Top Momentum Stocks NET Earnings Preview and Analyst Price Targets Looking further out, the next major catalyst for the stock arrives with the Oct. 29 (estimated) earnings report. EPS Estimate: 34 cents (Up from 27 cents year-over-year) Revenue Estimate: $737.95 million (Up from $562.03 million YoY) Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $335.20. Recent analyst moves include: Bernstein: Market Perform (Raises target to $181 on Sept. 17) Citizens: Market Outperform (Maintains target to $394 on Aug. 31) NET Stock Today: Cloudflare Price Action on Wednesday Cloudflare shares were down 1.77% at $348.72 at the time of publication on Wednesday, according to Benzinga Pro data. Photo via Shutterstock