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CLOUDFLARE, INCCLOUDFLARE, INCCLOUDFLARE, INC

CLOUDFLARE, INC

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NET trade ideas

CLOUDFLARE ($NET) longNote: - NYSE:NET - Reverse play of the last phase of extreme growth and consolidation - Software companies have been depreciated comparatively strongly in the last consolidation - Hot sector - Chart setting up nicely (support around 127$) - EMAs coming together - Fundamentals are great Disclaimer and Info: - No guarantee for the correctness of information or calculations - No advice or investment advice - All numbers in '000 US dollars (1.234 = 1.23 million USD) Company profile from Wikipedia: Cloudflare, Inc. is an American web infrastructure and website security company that provides content delivery network and DDoS mitigation services. Its services occur between a website's visitor and the Cloudflare customer's hosting provider, acting as a reverse proxy for websites. Its headquarters are in San Francisco. Main sources for data: - Investor Presentation 30. Sep. 2021 - Trading View - Own calculations Customers (new customers): FY2020Q3: 100.968 FY2020Q4: 111.183 (10.215) FY2021Q1: 119.206 (8.023) FY2021Q2: 126.735 (7.529) FY2021Q3: 132.390 (5.655) FY2021Q3: t.b.d. Customers with >100k$ (new customers >100k$): FY2020Q3: 736 FY2020Q4: 828 (92) FY2021Q1: 945 (117) FY2021Q2: 1.088 (143) FY2021Q3: 1.260 (172) FY2021Q3: t.b.d. Non-GAAP Gross Margin (= Gross Profit / Revenue): FY2018: 78% FY2019: 78% FY2020: 78% FY2020Q3: 76,35% FY2020Q4: 76,92% FY2021Q1: 76,76% FY2021Q2: 77,02% FY2021Q3: 78,23% FY2021Q4: t.b.d. DBNER (Dollar-Based Net Expansion Rate): DBNER (aka. Dollar-Based Net Expansion Rate) is one of the most important KPIs, especially for SaaS and other software companies. The DBNER measures how much more sales (revenue) a certain cohort of customers (usually those from last year) has also spent in the current year. Calculation of the DBNER: As a rule, the DBNER is calculated by dividing the sales of all customers who were still customers on the last day of a period (e.g. December 31, 2021) by the sales of the same customers in the previous period (base period, e.g. the year 2020). Important: The sales of customers who have canceled in the current period (2021) and new customers who were not customers in the base period (2020) are not considered. If you want to measure the ability to retain and increase sales (revenue retention) including terminations, the NRR (aka. Net Revenue Retention) is a better indicator in this case. What is a good DBNER? A DBNER of 112%, for example, would mean that a company's existing customers have spent an average of 12% more this year than in the previous year. Often the DBNER is in the range of 105-130%. Values ​​over 130% indicate a strong growth in spending within customer accounts. The DBNER is important because the simultaneous acquisition of new customers and a growing willingness to pay among existing customers can ideally lead to exponential growth. The so-called "Land and Expand" strategy, which tries to continuously increase sales of new customers, is essential for sustainable growth of software companies. If the DBNER falls below 100%, that means customers spend less and less on the company's services. At best, the decline can be compensated with the acquisition of many new customers. Ways to increase the DBNER are the sale of additional products, services and modules, the expansion of licenses to include new workstations and instances or the enforcement of volume or consumption-based business models. FY2019Q1: 118% FY2019Q2: 122% FY2019Q3: 121% FY2019Q4: 119% FY2020Q1: 117% FY2020Q2: 115% FY2020Q3: 116% FY2020Q4: 119% FY2021Q1: 123% FY2021Q2: 124% FY2021Q3: 124% FY2021Q4: t.b.d. Rule of "40": The "Rule of 40" ( aka . "Rule of Forty") is one of the simplest and most important SaaS and software metrics. This KPI was developed by the US-based software venture capital fund Bessemer Venture Partners. It tries to relate the growth and profitability of a company. The revenue growth and the free cash flow margin (also (non-GAAP) operating margin or adjusted EBITDA margin) are added as a measure of profitability. If the sum of the two values ​​results in a value greater than 40 , empirical data are used to assume that this is a very healthy company. The rule of 40 is particularly meaningful for software or subscription companies with high gross margins. The background to the relationship is that a company that is growing rapidly but is still losing money can be just as attractive or even more attractive than a company that is profitable but only grows more slowly. In addition, companies can often actively decide whether they want to give up profitability in order to grow even faster or save marketing costs and instead accept slow growth but deliver more EBIT . At the same time, a situation in which a company is neither profitable nor grows significantly faster than 20% can quickly become threatening. Often these companies do not achieve sufficient economies of scale and operating leverage to be profitable and sustainable in the long term. Therefore, the following applies quite casually: Either grow quickly or make a profit! If both of these don't work, the company often find itself in a dead end. FY2020Q3: 50,41% FY2020Q4: 45,70% FY2021Q1: 45,87% FY2021Q2: 50,21% FY2021Q3: 52,26% FY2021Q4: t.b.d. Sales Efficiency (aka Magic Number): The "Magic Number" is a KPI of the sales efficiency of SaaS and subscription companies. It goes back to the venture capital fund Bessemer Venture Partners, which specializes in SaaS companies in the US. To calculate the Magic Number, the newly acquired Annual Recurring Revenue (ARR) is annualized and related to sales and marketing expenses. Calculation: Specifically, you subtract the sales of the previous quarter from today's sales and multiply the difference by 4. Because the additional quarterly sales will accrue every year from now on, so it becomes ARR or annually recurring sales. This annualized turnover is now calculated from the marketing expenses of the previous period - because these have caused the increase in sales - and the result is a number that is usually between 0.5 and 2. FY2020Q3: 0,84 FY2020Q4: 0,76 FY2021Q1: 0,82 FY2021Q2: 1,05 FY2021Q3: t.b.d. FY2021Q4: t.b.d. If the magic number is below 0.5, there is probably no product market fit. No invest in marketing is needed. If the magic number is between 0.5 and 0.75, you are probably spending the right amount in marketing and sales and the amount should rather be optimized operationally. If the magic number is above 0.75 or even above 1, you should definitely try to spend even more money on acquisition, i.e. via marketing and sales.
NYSE:NETLong
by trustindata
2
$NET - TRADE IDEAHere is a trade idea on net. I think we are in wave 2 still and need to go make 1 more new low near the 61.8 - but could be wrong. A move over the last pivot high ~145 and I will be targeting wave 3 PT of 165. This is going to be either 1 of two things: 1) over top breakout - momentum trade looking at short term likely 150c (14 days most likely) 2) BTD trade near 61.8 and seeing a reversal out of that area - this BTD would be with time and likely target lower strike 140. That way on the 145 test can be first trim zone
NYSE:NET
by btwice53190
Cloudflare teaching moment. Meteoric rise = catastrophic dump.Hi everyone, Today I would like to share a piece of knowledge on parabolic growth and poor market structures. Let us take a look at NYSE:NET Cloudflare stock. This was an attractive buy back in 2020. As always, nobody saw that until everyone started screaming about this stock on Twitter. I saw an opportunity in investing into Cloudflare later in 2021 for a long-term. I did not know what's coming. At the beginning of October, after a decent sell-off something strange began happening. Stock rose TWELVE days in a row. And not just stayed barely positive, it gained insane 68% in price during this short period. Right there I knew this was not sustainable and price won't last up there for long. Yes, I sold at 175 . Yes, I missed a run up to 220 . But, really, did I? Noone can predict the top. But you can predict the inevitable downfall. The Lesson. Look at the chart. You see the price in the first box going parabolicly up. The price took off to the moon and was hovering up in the air. Thus, poor structure has been created. There is no single support level from 137 to 182 . The Market hates poor weak structures and it tends to repair them sooner or later. That is exactly what happened with Cloudflare stock. Price has been flushed from 204 down to 123 as fast as it flew up there back in October. You can see that in the second box. The structure has been repaired. A lot of data points were created in the process, which will help with the analysis in the future. This might be a rebirth of Cloudflare stock constituting healthy future movement. Trade wisely and good luck! ----------------------------------------------------------------------------------------------------------------- Disclaimer!!! This is not financial advise
NYSE:NETEducation
by AyBe_Invest
2
Falling Wedge- BullishNET starting to catch my eye here after holding this falling wedge for quite some time now. Seemingly has found some support as it closed on the daily timeframe sitting right on its 200-Day EMA. Bullish and will be looking for a breakout from this wedge (Broader Markets Permitting) - Just some support and resistance levels along with some RSI-based supply and demand zones to keep an eye on the meantime- Hourly Timeframe Attached Below - Sitting on its 200-day EMA - RSI is Nearing Oversold Territory (Not Pictured) - Bollinger Bands Squeezing on the Hourly Timeframe (See Attached Chart Below) - Bullish Hidden Divergence on the RSI on the Hourly Timeframe (See Attached Chart Below) - MACD Cross on the 4-Hour Timeframe (Not Pictured) - Buyer Volume Starting to Pick up Relative to Seller Volume PT1- $132.34 PT2- $134.40 PT3- $136.36 PT4- $138.92 --Hourly Timeframe--
NYSE:NETLong
by jacobosiason7
2
NET1. We see the retention of ema200 and the level of 132.7 (not measured). If we have a supposedly stretched fifth in the third wave, then wave A has now formed 2. Formally, we are still in the channel. 3. RSI, MFI form the bottom and even small divergences of Class B and A, respectively. 4. There are also hidden divergences. The RSI is relative to the previous bottom. MFI is a hidden diver relative to the last bottom, as well as relative to the last touch of ema200. 5. We hold 0.786 of the last jerk. 6. We can go lower and test the 113.5 zone, to fibo 0.5 relative to the entire annual movement + ema60 7. The weekly is not so positive, only a weak hidden diver on the rsi. Takeaways in the yellow fibo zone. Marking by fibo, the fibos themselves with fillings are not in the logarithm. If there is no big growth in all, you can still try to win back a 2-5% rebound.
NYSE:NETLong
by S0rt0
NET - bounce candidate?While this is definitely on my 'high price/sales ratio' short candidate list, some of the action the past few days is suggestive of a short term bottom/bounce. * MACD starting to turn up (hourly almost crossing the 0 trigger line) * RSI coming out of oversold * (not shown) coming out of bottom end of bollinger bands) * a few long wick hammer-esque candles * possible descending wedge (not well supported by volume story tbh, and could even be a downtrend *channel*), I'm looking for a trade up to 170 in the next few sessions -- an optimistic view might be up to 180.
NYSE:NETLong
by tacosaurus
1
NET, Daily, Deep Crab NYSE:NET $NET CloudFlare, Daily, Deep Crab ------------------------------------------------------- Buying between 130.54 - 145.49 Sell @ Target I : 165.58 , Target 2 187.23 DISCLAIMER: I am not a financial /investment advisor. All information i am sharing here is for entertainment purposes only and should not be considered personal investment advice. While the information provided is accurate, it may include errors or inaccuracies. Please, do your diligence when it comes to investing or trading in the market. You are responsible on your choice. Thank you
NYSE:NETLong
by adhamdallou