Why Did Cloudflare Stock Rise 13% in February?
Shares of Cloudflare (NYSE: NET) rose 13.4% in February following a strong quarterly earnings report. The stock charged 30% higher in the first two weeks of the month, but it surrendered a large chunk of those gains during a marketwide stock sell-off.
Cloudflare reported excellent quarterly results on Feb. 9. Its revenue grew 42%, and it achieved a new all-time high free cash flow of $34 million. The company exceeded analyst expectations for both sales and earnings. Cloudflare also surpassed an important milestone, with over 2,000 customers paying at least $100,000 annually. The company's net dollar retention, which measures its ability to retain and expand customer relationships, remained above 120% despite declining from prior periods. That's a strong metric indicating product quality and customer satisfaction.
Cloudflare also provided an encouraging forecast for investors. The company is expecting 35% revenue growth and 50% expansion in adjusted operating profit, according to guidance. Investors are worried about slowing growth and shrinking margins in the face of macroeconomic trouble. Cloudflare's solid results and positive outlook directly addressed investor concerns, instilling confidence to drive the stock higher.
Source Fool.com
