Comment by kristjansson
2 months ago
> Cloudflare expects second-quarter revenue of $664 million to $665 million,
obviously $2.5e9ish/yr is substantial in absolute terms ... but that's it? They intermediate half the internet and only capture $7m/day?
Businesses tend to choose them because they're cheaper than alternatives.
They are in a great position to generate a lot of value without rising prices, they haven't realized it yet because what they have to do is pretty boring.
I think about investing in Cloudflare but that P/E ratio scares me off every time.
Their revenue is growing 30% yoy, so investors are speculating it to pay off in the end.
The more they grow the harder it is to follow such rates.
They don't have a PE ratio. They have never made a profit.
PE ratio too high!
Sir, that is price/revenue ratio
(jawdrop)
NaN is scary
Don’t worry about P/E ratio. If you worry about P/E ratio all the time you would have missed every major tech opportunity for the past decade.
not true.
I use Cloudflare for a lot of my side projects. It's a pleasure to use, and I manage to stay under the free tier. It does feel like they should be bigger in the cloud space, but I imagine the major players get a lot of revenue from VMs, which is a space Cloudflare has avoided.
Revenue is not profit. They "capture" much less than $7m/day.
Oh less than Atlassian. Suprised.
Atlassian has a moat of features despite being expensive. You see nibbles by stuff like Monday.com but never big chunks.
CloudFlare is honestly still iterating to find a moat other than 'really cheap'.
High P/E means a good moat.
(Too high and everyone is looking for a start-up to eradicate your product segment of course).
high P/E means good income growth prospects. a good moat is one way to achieve that, but not the only way.