Cloudflare (NET) Laps the Stock Market: Here's Why

Investors will be eagerly watching for the performance of Cloudflare in its upcoming earnings disclosure. The company's earnings report is set to be unveiled on August 6, 2026. The company's earnings per share (EPS) are projected to be $0.27, reflecting a 28.57% increase from the same quarter last year. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $665.42 million, up 29.88% from the year-ago period.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $1.21 per share and revenue of $2.82 billion. These totals would mark changes of +30.11% and +29.96%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for Cloudflare. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 32% higher. As of now, Cloudflare holds a Zacks Rank of #2 (Buy).

Digging into valuation, Cloudflare currently has a Forward P/E ratio of 217.07. Its industry sports an average Forward P/E of 18.86, so one might conclude that Cloudflare is trading at a premium comparatively.

Investors should also note that NET has a PEG ratio of 5.03 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NET's industry had an average PEG ratio of 1.07 as of yesterday's close.

The Internet - Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 150, positioning it in the bottom 40% of all 250+ industries.

The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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