Cloud Stock Has Its Best Day in Months on Beat-and-Raise

Cloudflare released its post-close earnings report yesterday

IT Leader Cloudflare Inc (NYSE:NET) is up 3.2% to trade at $76.74 this morning after the company reported better-than-expected second-quarter results and raised its full-year guidance. Equity now expects earnings of 70 cents to 71 cents a share, with 2024 earnings of 61 cents a share.

On the charts, while the stock has struggled over the past few months, it remains 18% higher year-over-year, with support below the 320-day moving average. Today, Cloudflare shares is on track for its best daily percentage gain since February.

Analysts are leaning bearish, with 19 of the 29 stocks surveyed rated “hold” or worse and 10 “buy” or “outperform.” Short interest has also increased, up 9.4% over the past two reporting periods and now accounting for almost 3% of the total available stock volume.

Despite recent weak performance, call traders are circling. That’s in line with the stock’s 50-day call/put volume ratio of 2.05 on the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the 95th percentile for the year.

Even though the session has only just started, options are very hot, with 5,967 calls and 3,504 puts crossing the tape so far — twice the average intraday volume. The most popular are the weekly 8/2 80- and 86-strike calls, expiring today.