- Guggenheim Securities analyst John DiFucci upgraded Cloudflare Inc NET to Neutral from Sell.
- The analyst is bullish on the company’s potential and management’s vision and thinks the company’s 2023 expectations were ‘exceedingly too high’ amid a weak economy. The upgrade was also in response to a 32% drop in the company’s shares (to the analyst’s lowered price target of $40) post reporting Q1 2023 earnings results last week.
- The company’s Q1 2023 revenues of $290 million were broadly in line with the consensus, and adjusted EPS of $0.08 surpassed the consensus of $0.03.
- NET guided Q2 2023 revenues of $305.0 million-$306.0 million and adjusted EPS of $0.07 to $0.08.
- The company lowered 2023 revenues forecast to $1.280 billion-$1.284 billion and currently sees adjusted EPS of $0.34-$0.35. DiFucci expects 2023 revenues of $1.283 billion and adjusted EPS of $0.34.
- The analyst expects the macro environment to improve in H2 2023 and higher cross-selling of other Cloudflare products and solutions to the existing customers.
- Price Action: NET shares are trading higher by 8.63% at $43.97 on the last check Friday.
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