Shares of Cloudflare (NYSE: NET) rose as much as 7.2% on Monday, before settling to close up 4.1% after a notable analyst upgrade.
Citi takes a measured approach toward Cloudflare stock
In note to clients today, Citigroup (NYSE: C) analyst Fatima Boolani maintained her firm’s neutral rating on Cloudflare stock but also raised her per-share price target to $82 from $66. Boolani cited “encouraging” channel feedback more broadly for stocks in the cloud observability and DevOps spaces, while noting that the recent rally in Cloudflare and its peers “leaves an unnerving stock setup” leading into their impending quarterly reports.
Indeed, Cloudflare stock has rallied nearly 80% over the past year, fueled by demand for its cybersecurity solutions, its content delivery network platform, and increased web traffic from the global rise of generative AI applications.
What’s next for Cloudflare shareholders?
Cloudflare is scheduled to announce fourth-quarter 2023 results roughly two weeks from now, on Feb. 8. The company’s latest guidance calls for quarterly revenue of $352 million to $353 million, up 29% year over year, which should mean adjusted net income doubles over the same period to $0.12 per share.
Whether Cloudflare lives up to that guidance might well determine the short-term direction of its stock, especially after such a strong rally in 2023. But as Wall Street bears turn incrementally bullish in the meantime, it should be hardly surprising to see the stock continuing to rise from here.
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Citigroup is an advertising partner of The Ascent, a Motley Fool company. Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Cloudflare. The Motley Fool has a disclosure policy.
Why Cloudflare Stock Soared Today was originally published by The Motley Fool