Recent IPO Cloudflare Closes Out 2019 Strong and Is Poised for More Growth

After rising 20% after its debut as a public company in September 2019, Cloudflare (NYSE: NET) hasn't been able to hold on to any positive traction since. There are reasons for that, including a premium valuation factoring for continued double-digit sales growth and a lockup period on shares expiring the first half of March 2020 (which could trigger share price declines if too many of those shareholders decide to sell). Nevertheless, the cloud computing and internet security outfit has a unique growth strategy and plays in a fast-growing industry, and is thus worth a look after delivering a strong end to 2019.

During the final quarter of 2019, Cloudflare's sales accelerated from the pace set during the first nine months of the year. Revenue increased 51% to $83.9 million, and adjusted gross profit also grew as the company added more customers to its lineup of cloud-based web delivery and security services. In total, Q4 helped Cloudflare notch a 49% increase in revenue in its first year as a public concern, and adjusted net losses for full-year 2019 were $69.5 million compared with $59.5 million in losses in 2018 as cash was funneled back into the business to maximize growth.

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Source Fool.com