NET Stock is a Great Investment, Despite Short-Term Headwinds

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cloud service company Cloudy (NYSE:REPORT) had a tough spring. Many tech stocks are hammered because of the current market, and the climate for investors is currently very difficult due to rising rates and widespread uncertainty. Earlier this month, Cloudflare far exceeded earnings expectations, but that didn’t help. The lack of positive momentum in NET stocks must be frustrating for investors.

For conservative investors, this could be a good time to invest in dividend and pension stocks to avoid market volatility. However, if you can handle more risk, NET stocks are a great prospect to buy.

In the latest earnings report, the company produced stellar numbers and is on track for even more growth. However, stocks could remain depressed for some time. The company needs a “rising tide lifts all boats” scenario. In the meantime, you can establish a nice discounted position.

Is the net stock a purchase?

Okay, the company reported a loss for the first quarter. It’s not good, but let’s look at what he said about it. The loss was 13 cents per share and revenue was $213 million.

Revenue jumped 54% over the period and annual recurring revenue from loyal customers increased 27% compared to the same period last year.

Cloudflare expects to earn between $226.5 and $227.5 million this quarter. The company’s target for adjusted earnings performance is between breakeven and a loss of $0.01 per share.

As the market reacts to recent rate hikes and downbeat comments from the Federal Reserve, Cloudflare is doing well despite a general sense of negativity. And it’s important to note that he didn’t miss the revenue target.

Cloudflare’s global presence enables 95% of internet users to be within 50 milliseconds of their data centers. That’s amazing coverage and probably saves a lot on bandwidth costs. Proximity to where the data is processed provides high performance and faster traffic.

Investors do not know how things will develop in terms of monetary policy. Inflation rates will affect markets in different ways, and we’ve seen evidence of that over the past few weeks. For example, as mentioned above, tech stocks fell two weeks ago, wiping out billions of dollars in valuations.

Therefore, investors are unlikely to return to the business anytime soon in this environment. However, as ace investor Louis Navellier put it, “the long-term outlook remains strong.”

At the date of publication, Faizan Farooque did not hold (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

Faizan Farooque is a contributing author for InvestorPlace.com and many other financial sites. Faizan has several years of experience in stock market analysis and was a former data reporter at S&P Global Market Intelligence. His passion is to help the average investor make more informed decisions about their portfolio.

Ann J. Cox