Investors of San Francisco-based web security and content delivery company Cloudflare (NYSE:NET) have struggled since mid-November 2021 — there’s no denying it. However, April and May of 2022 could turn out to be terrific months for NET stock holders.
Midday April 12, the Cloudflare share price was up around 7%. Meanwhile, the Nasdaq was up roughly 1.25%.
In other words, NET stock was outperforming technology stocks, even on a bullish day. Not only that, but the stock looked like it was getting ready to pierce the important $120 level.
Perhaps, it’s time for Cloudflare’s investors to prepare for a revisit of the $200 level. Heck, the stock was there in November 2021 and even reached $221.64 at one point.
It’s not an exaggeration to say that Cloudflare has been in growth mode lately. As InvestorPlace contributor Sakshi Agarwalla pointed out, “The company recently announced the acquisition of Area 1 Security’s native cloud platform. The purchase will enable Cloudflare to provide a zero-trust security service.”
Agarwalla further observed that Cloudflare’s revenue grew from $287 million in 2019 to $656.4 million in 2021. This impressive revenue ramp-up implies a CAGR (compound annual growth rate) of 51.2%.
Furthermore, Cloudflare’s management anticipates that this year, the company’s revenue will expand by 42% to a midpoint of $929 million. Clearly, this is no time to be bearish on NET stock.
What prompted the share-price surge toward $120, then? Possibly, the investing community is getting excited about Cloudflare’s upcoming earnings data release.
According to a press release from April 11, Cloudflare will report its financial results for 2022’s first quarter after the close of the U.S. market on May 5. Furthermore, the company will host an Investor Day on May 12.
Could these upcoming events give NET stock the bump it needs to hit the $200 mark? Only time will tell, but you’ll definitely want to mark your calendar for those dates in May.
In the meantime, it’s not a bad idea at all to accumulate some Cloudflare shares. If the stock breaks through $200, as they say, the sky’s the limit.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
