[HN Gopher] Cloudflare Announces Fourth Quarter and Fiscal Year ...
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Cloudflare Announces Fourth Quarter and Fiscal Year 2020 Financial
Results
Author : ve55
Score : 97 points
Date : 2021-02-11 21:22 UTC (1 hours ago)
(HTM) web link (cloudflare.net)
(TXT) w3m dump (cloudflare.net)
| gigatexal wrote:
| Not bad financials. Healthy margins, relatively small (in my
| mind) losses and revenue growing well. At this rate they should
| be profitable in a year? 2 maybe?
| weeboid wrote:
| For growth stocks, doesn't this signal stagnation?
| dreaminvm wrote:
| Solid results with exceptional margins and a healthy FY21
| outlook. I wonder if markets just have unrealistic expectations
| (from the craziness of GME/AMC and cannbis stocks) or people are
| just taking profits on a ~400% run up since IPO.
| subsaharancoder wrote:
| the latter, people booking unrealized gains pre-earnings, then
| post earnings it finds a comfortable price point, then more
| people buy and we rinse and repeat..
| cma wrote:
| Cloudflare is still up 10% for the month.
| de6u99er wrote:
| My issue with Cloudflare is, that they don't do any content
| checks.
|
| I remember a friend of a friend who knows someone who
| participated in various Anonymous missions, that CloudFlare is
| protecting islamic terrorist forums, and recently I learned fom
| another friend of a friend that they are also protecting QAnon's
| and Trump's online forum where rrcent insurrection was allegedly
| planned and coordinated.
|
| There's tons if alternatives for those who don't want to do
| business with such a company.
|
| E.g.:
| https://www.g2.com/products/cloudflare/competitors/alternati...
| lolinder wrote:
| That sounds to me like a good thing. I don't want to trust a
| company with my critical infrastructure if they have a habit of
| moderating their customers' content.
| Archio wrote:
| Genuine question. If you found out that your water utility was
| servicing an Islamist group's house, would you cancel your
| service because you don't want to do business with them?
| nickysielicki wrote:
| Down 6% after hours, for reasons that I don't understand.
|
| Personally, I'm more-sure that Cloudflare will be around in 25
| years than I am that Facebook will be around in 25 years. Their
| customers are real-valuable customers paying for a real-valuable
| service, and that's not going away anytime soon. Meanwhile, their
| serverless stuff is very cool and unique. I think their durable
| objects are going to go mainstream someday. They work on
| hard/interesting/real technology, that's _gotta_ be worth
| something.
|
| I predict that one day, we'll see a C somewhere in "FAANGM".
| Uehreka wrote:
| I don't get why people still say FAANG, even. Netflix is doing
| great and has some great tech, but these days it seems like
| they're way more of a TV megastudio with a really great
| engineering dept than a tech giant like Apple, Amazon, Facebook
| and Google.
|
| Sure, they're no slouches, but it feels like any acronym that
| includes Netflix needs to also include Microsoft for sure. In
| fact, by the time you get to Netflix I feel like you'd have to
| have included Salesforce, Tesla, maybe even Twitter, and
| probably half a dozen names that aren't coming to me right now.
| catmanjan wrote:
| Most times I see faang it's in the context of tech jobs, and
| Netflix is notorious for its wages - just my perspective as
| an outsider in Australia...
| nostrademons wrote:
| Much of that's historical reputation, though. Netflix
| actually underpays compares to some of its peers in the
| valley now. As of early 2020 my perception (somewhat based
| on levels.fyi data, as well as personal & friends' salary
| data) is that the ordering is roughly FaceBook > Snap >
| AirBnB > Google > Lyft > Stripe > Uber > Netflix >
| Microsoft > Apple > Amazon > (old-line tech like IBM,
| Oracle, HP, Juniper, Cisco). This was pre-COVID and tends
| to move around a lot with stock prices though.
| nostrademons wrote:
| I'm fond of "MAGA" for "Microsoft, Apple, Google, Amazon".
| That's the 4 largest tech companies on the market, and
| they're the ones really making America great again.
| daveevad wrote:
| that is quite the synchronicity.
|
| that rebrand may be daunting but i support it.
| [deleted]
| tayo42 wrote:
| I haven't really thought about it much, Netflix engineering
| hype seems to have died down? Or maybe I'm just oblivious.
| They seem more regular than they used to be? All their open
| source was hyped up, I even got stuck using some of it
| because of people following fads.
|
| And yeah agree Twitter always seems to be missing from
| engineering hype. I guess their open source and engineering
| out in the open is a shell of what is was.
|
| Tesla pays low, software isn't the main focus. Salesforce is
| a b2b company, that i don't think most people actually like?
| Do they pay like other companies or have unusual or
| interesting software engineering problems?
| m12k wrote:
| > Down 6% after hours, for reasons that I don't understand.
|
| A stock doesn't go up or down based on whether it does well or
| poorly, it does so based on how it performs relative to the
| expectations that were already priced into it. If it does well,
| but not as well as the market was expecting, then it will still
| go down.
| NationalPark wrote:
| It's also after hours, which means volume is lower, and also
| means nobody has traded options since the report.
| xwdv wrote:
| Three. Day. Rule.
| prewett wrote:
| Cloudflare seems like a promising stock, but the dual-class
| shares really put me off. It doesn't even look like Class B is
| even traded; at least for, say, Google, you can buy their Class
| B stock.
| selectodude wrote:
| You can't buy class B google stock. It's owned solely by
| Larry Page, Sergei Brin, and a handful by Eric Schmidt and
| others. They're not traded on public markets and give Page
| and Brin alone 51 percent of all voting rights. Furthermore,
| if any class B shares are sold, they're converted to class A
| and lose their 10x voting power.
| quickthrowman wrote:
| Class A shares (GOOGL) have one vote, Class C shares (GOOG)
| have 0 votes
| Thaxll wrote:
| Worth $28B and only have revenues of $450M a year, that should
| explain, this compagny is overevaluated.
| ksec wrote:
| I could see Cloudflare grow at least another 4X in the next
| 4-5 years without any other product. That put it at ~2B
| Revenue.
|
| That isn't too bad. And considering they are still innovating
| and working on products that directly competes with AWS and
| EC2, all of a sudden $28B valuation isn't so crazy. AWS is
| $40B revenue alone and still growing 33% YoY. The whole Cloud
| industry still have room to grow with no ceiling in sight.
|
| While the whole stock market is definitely bubbling at the
| moment. I wouldn't say Cloudflare is overvalued on its growth
| factor.
| thefounder wrote:
| The whole market is overvalued. It has become a kind of
| bitcoin. Fundamentals don't matter anymore. It's positioning
| and volume.
| MuffinFlavored wrote:
| > The whole market is overvalued.
|
| This is actually fake news and I'll tell you why.
|
| Bond yields have never been this low. No other alternatives
| to park capital if you are seeking yield/return.
|
| The market is actually correctly valued if you take M2
| money circulation/supply into account as well. Something
| like that. I read it on r/investing. You have to sift
| through the weed/penny stock posts to find the good
| information.
| thefounder wrote:
| >> No other alternatives to park capital if you are
| seeking yield/return.
|
| So you park it into bitcoin and stocks that grow... even
| if there is no reason for them to grow. I believe my
| assertion still stands that price is set by positioning
| and volume not by fundamentals. I wouldn't say that that
| companies are overvalued...the valuation for most of them
| has little to do with the reality. For example investing
| in bitcoin or Tesla becomes more and more the same thing.
| khyryk wrote:
| I've been thinking about this for a while. Let's say that
| the USD is indeed 40% devalued and the market melted up
| significantly as a result of this -- does this not make
| "value" stocks a massive bargain? That is, if something
| was at a PE of 10 before the money printing, has
| maintained reasonable fundamentals, and remains at a PE
| of 10, isn't it stunningly undervalued if the same money
| printing is used to justify "growth" stock rallies?
| [deleted]
| reducesuffering wrote:
| *Current revenues of $450M a year. However, $28B for revenues
| of $5b a year, 10 years out? Undervalued with ZIRP.
| dmead wrote:
| cloudflare has been talked about on WSB and /r/stocks for
| months. it's probably pumped a good bit already and this was a
| reality check.
| notyourwork wrote:
| To be concerned with any noise associated with WSB or others
| is dependent on your time horizon. If Im buying Cloudflare
| because I plan to own it in 5-10 years, that is likely moot.
| If you want to get rich quick, its a bet like any other.
| Traster wrote:
| >I predict that one day, we'll see a C somewhere in "FAANGM".
|
| Honestly, this is such a stupid game. The original acronym was
| FANG. It included Netflix which at the time it was coined was
| orders of magnitude smaller than Apple, the acronym didn't
| include Apple, and now it has about 10 different deriviations
| which does and does not include Netflix (whose core business
| has been invaded by not only Apple and Amazon but also Disney
| and HBO), but does include Microsoft - which isn't whilst very
| successful, isn't dominant anywhere.
|
| The whole value of FANG was that it spelt out the word fang -
| beyond that, it was completely devoid of meaningful value. It
| works in the same way that a big red button Jim Cramers' desk
| works. It doesn't.
| pbiggar wrote:
| FAANG was originally about companies that paid massive
| engineering salaries, which is why Netflix was included and
| Microsoft wasn't.
| reducesuffering wrote:
| No it wasn't. Cramer coined it due to just FANG (not apple)
| being totally dominant in their markets and having meteoric
| rises in stock prices at that time.[0]
|
| [0]https://en.wikipedia.org/wiki/Big_Tech#FAANG
| ptero wrote:
| > Down 6% after hours, for reasons that I don't understand
|
| "Buy on the rumors, sell on the news". Sell on the news part I
| think
| gsich wrote:
| Better find a way to add the C In "GMAFIA".
| jvanderbot wrote:
| The stock market is not about buying ownership in long-term
| stable, profitable companies, unless you zoom wwaaaaaaaaaaay
| out on the charts.
|
| Day to day it's about riding hype up and jumping off before
| anyone else.
|
| CISCO was a great example of this back in the day.
| https://www.fool.com/investing/2020/12/27/2020-incredible-st...
| BitwiseFool wrote:
| CAMFANG?
| alex_young wrote:
| FC'G A MAN
| whoisburbansky wrote:
| > Down 6% after hours, for reasons that I don't understand.
|
| Not trying to be snarky, but this is how I feel about pretty
| much all AH movement after earnings, for any company. Do you
| usually not feel this way?
| edmundsauto wrote:
| I think this is the most accurate way to feel about market
| movement. People who give you explanations might be right,
| but how would they even know? Stock narratives are post hoc
| divination a without much exploration of alternative
| explanations.
|
| I tell myself that any explanation might be a neat story, but
| what evidence is there that isn't just someone's opinion?
| (Not much, usually.)
| darkwizard42 wrote:
| It pretty much comes down to how expected or unexpected the
| guidance and exceeds/misses are on the metrics of interest.
|
| If you know that FB, GOOG, PINS are all having amazing
| quarters, you might see SNAPs price rise in advance of their
| earnings because if some other big ad/social network giants
| are doing well, surely SNAP will too!
|
| Then there are truly amazing beats or misses by companies and
| the street tracks those as well.
|
| A more recent example might be Lyft & Uber. Lyft actually
| came in at the top end of QoQ rev growth and cut losses well.
| Uber's options market and stock immediately reflected Lyft's
| earnings report even though Uber was still 24 hours away from
| reporting. Uber's report was good not great but the stock had
| already gained in the day prior and thus not much left to
| squeeze up.
|
| Just my 2 cents on how some of these things happen
| blantonl wrote:
| The stock has had a 25% run up to earnings in the past month.
| It's a classic buy the rumor sell the news.
|
| Here's your opportunity to buy the dip.
| vmception wrote:
| and if it was up you would have said "new information that
| the market was not able to price in" or "the forward guidance
| was good" or just congratulate the leadership
| djrogers wrote:
| And it would still likely be correct. The market reacts to
| news - not met expectations.
| jedberg wrote:
| > Down 6% after hours, for reasons that I don't understand.
|
| I think the street was hoping for a rosier outlook on
| profitability next quarter.
| rvz wrote:
| > Down 6% after hours, for reasons that I don't understand.
|
| Well time to buy some on Friday near market close then before
| it reaches >$100.
| subsaharancoder wrote:
| this is typical behavior of stocks, even with stellar earnings
| many of them go down after hours, go checkout Corsair
| mathattack wrote:
| The valuation is based on hyper-aggressive growth expectations
| that compound over time. If you shave even a few percent off
| the growth projections stock takes a hit.
|
| It's hard to switch your CDN provider in the short term, but
| it's feasible that Amazon, MSFT or Google could bump them out
| of every large enterprise in the long term.
| acdha wrote:
| > It's hard to switch your CDN provider in the short term,
| but it's feasible that Amazon, MSFT or Google could bump them
| out of every large enterprise in the long term.
|
| That's what I'd worry about, too: for a large company,
| there's a fairly large cost to dealing with each new vendor.
| Once Amazon, Microsoft, Google, etc. has a CDN which is
| competitive for your needs someone is going to ask whether
| the extra benefits are greater than the cost of managing a
| contract, security, training, etc.
| llboston wrote:
| Revenue is $125m this quarter, about 50% over last year. P/S is
| around 60, which might be too high to many people and therefore
| the correction.
| quickthrowman wrote:
| Before 0% interest and euphoria, 20-40x was a good SaaS
| NTM/Revenue multiplier. SNOW is upwards of 200x at this point
| I believe
| tootie wrote:
| It's a mantra of stock trading to buy on rumor and sell on
| news. This report was likely already priced in based on
| estimates.
| dcolkitt wrote:
| Does Cloudflare have any defensible moat? If Google or
| Microsoft decided to muscle Cloudflare out of business
| tomorrow, what's to stop them? In comparison, we already know
| that Google can't take out Facebook.
| tidepod12 wrote:
| The major Cloudflare products (namely the CDN, WAF, DDoS
| protection, DNS management, and even serverless workers) are
| already replicated in AWS, GCP, and Azure. AFAIK the main
| thing that draws people to Cloudflare instead is "it's easier
| to use than bloated AWS/etc." And while that might be a
| completely valid value proposition, I'm not sure if it's a
| long term winner, especially as more and more companies
| migrate to the big 3 cloud providers.
|
| It reminds me a lot of Dropbox and the situation where for
| years Dropbox's value proposition was "yea OneDrive and
| iCloud provide the same service, but people like Dropbox
| because it is independent, unbloated, and simpler to use".
| But over time that's become less true, and as more and more
| companies move to using O365, they end up getting OneDrive as
| part of the deal anyway. And once you're already working in
| an environment with OneDrive, why continue using Dropbox?
| rusteh1 wrote:
| I wouldn't call Cloudfront bloated. It is under featured if
| anything, the product has seen little change in the past
| few years.
| DamnYuppie wrote:
| My feeling is that the price had risen expecting a more stellar
| result or bullish guidance. When the street didn't get that
| they took their profits and ran.
|
| You can watch the same thing happen to CRM and ZM now in the
| days leading up to their next earnings call.
| spoonjim wrote:
| What does it mean "the street took their profits and ran"?
| Who did they sell the stock to?
| aaomidi wrote:
| To buyers who had placed orders way lower than what the
| stock was worth.
| nostrademons wrote:
| Folks like the OP who believe CloudFlare is a good long-
| term buy but weren't paying attention before the earning's
| announcement.
|
| There's usually some subsegment of investors that believe
| that earnings are going to be really good, bid up the price
| beforehand, and figure they'll sell after earnings. If that
| group is smaller than the folks who see the earnings and
| figure it actually _is_ a really good buy that they want to
| own, you get a stock pop after earnings. If the former
| group is larger than the latter, you get a stock drop. This
| cycle the former was bigger than the latter for CloudFlare.
| It 's gone the other way both other cycles for CloudFlare
| and this cycle for other stocks. (Google and Disney, for
| example, got large after-hours pops after earnings.)
| BasedInfra wrote:
| I mean this absolutely no thesis and it's money I can lose but
| been invest in companies that have solid, quality documentation.
|
| As one of them cloudflare's done me a solid so far.
| xorx wrote:
| Maybe I'm too old, and stuck in the mud with the pre-ICANN
| intention of the original TLDs, but does it seem odd to anyone
| else that they host their network services on .com and their
| corporate information on .net?
| judge2020 wrote:
| I think the joke here is that their stock symbol is NET.
| azinman2 wrote:
| Surprised they could get that after all the net related
| terminology in the early 2000s.
| byhemechi wrote:
| Cloudflare is one of those things that if I'm asked about it I'll
| sound more positive than astroturfing. Their API's a re great,
| I've had to contact support _once_ and my experience was good and
| their rates are certainly reasonable for the scale of projects I
| 've used them on.
| buckybadger14 wrote:
| What is the market for cloudflare? Do you think every company who
| has a website will use some of their products? Understanding
| TAM...
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