Investors seeking a deal on richly valued stocks that trade at 52-week lows are looking in the wrong place. Expensive stocks that lost around a quarter of their value are on sale for a reason. Markets are expecting serious headwinds that will impair their growth.
Cloudflare (NET) supplies a content delivery network for Fortune 500 companies and the startup community. When the FDIC shut down Silicon Valley Bank, it tightened funding for the latter group. Cloudflare posted revenue growing by 36.8% but still lost money. Its revenue expectation of $1.28B to $1.284B is below the $1.33B consensus.
Value hunters should patiently wait for NET stock to trade at lower prices before starting a position.
Zscaler (ZS) is a cloud security supplier. It closed at a yearly low on Apr. 28 after posting Q2/2023 results on Mar. 2, 2023. After revenue grew by ~ 52% to $387.6 million, it earned only 37 cents a share non-GAAP. It expects no sequential growth in its Q3 revenue.
Alteryx (AYX) lost 19% after posting -$0.19 EPS. For 2023, revenue will be $980M to $990M, growing by only 15% to 16%. The annualized recurring revenue-based strength is attractive. Watch AYX and consider it at below $40.