Cloudflare (NYSE:NET) Downgraded by Wall Street Zen to "Hold"

Key Points

• Wall Street Zen downgraded Cloudflare from “Buy” to “Hold,” although analysts overall maintain a “Moderate Buy” consensus with an average price target of $330.59.
• Cloudflare reported quarterly EPS of $0.29, beating estimates by $0.02, while revenue rose 35.9% year over year to $696.06 million; however, the company still posted a negative net margin of 8.21%.
• Insiders sold approximately $143.4 million worth of shares over the past 90 days, while institutional investors own 82.68% of the stock. Shares recently opened at $325.68, near the consensus target but below the 52-week high of $370.35.

Cloudflare (NYSE:NET - Get Free Report) was downgraded by research analysts at Wall Street Zen from a "buy" rating to a "hold" rating in a report issued on Sunday, Wall Street Zen reports.

NET has been the subject of several other reports. UBS Group lifted their price objective on Cloudflare from $250.00 to $350.00 and gave the company a "neutral" rating in a research note on Friday, August 7th. Guggenheim increased their target price on Cloudflare from $140.00 to $160.00 and gave the stock a "sell" rating in a research note on Friday, August 7th. Benchmark cut Cloudflare to an "underperform" rating in a report on Tuesday, July 7th. Citigroup reaffirmed a "market outperform" rating on shares of Cloudflare in a research report on Monday, August 31st. Finally, Deutsche Bank Aktiengesellschaft raised Cloudflare to a "buy" rating in a research report on Tuesday, July 7th. One investment analyst has rated the stock with a Strong Buy rating, twenty-one have assigned a Buy rating, six have given a Hold rating and five have given a Sell rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $330.59.

Cloudflare Price Performance

Cloudflare stock opened at $325.68 on Friday. Cloudflare has a 52-week low of $158.83 and a 52-week high of $370.35. The firm has a market capitalization of $115.12 billion, a price-to-earnings ratio of -561.52, a PEG ratio of 259.07 and a beta of 1.65. The company has a fifty day simple moving average of $318.54 and a 200-day simple moving average of $267.48. The company has a quick ratio of 1.82, a current ratio of 1.82 and a debt-to-equity ratio of 1.22.

Cloudflare (NYSE:NET - Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The company reported $0.29 EPS for the quarter, topping analysts' consensus estimates of $0.27 by $0.02. The firm had revenue of $696.06 million for the quarter, compared to the consensus estimate of $664.66 million. Cloudflare had a negative return on equity of 3.88% and a negative net margin of 8.21%. The firm's revenue was up 35.9% compared to the same quarter last year. During the same quarter last year, the business posted $0.21 earnings per share. Cloudflare has set its Q3 2026 guidance at 0.340-0.340 EPS and its FY 2026 guidance at 1.250-1.260 EPS. On average, equities analysts anticipate that Cloudflare will post 0.03 EPS for the current fiscal year.

Insider Transactions at Cloudflare

In other Cloudflare news, insider Michelle Zatlyn sold 33,003 shares of Cloudflare stock in a transaction that occurred on Wednesday, October 7th. The stock was sold at an average price of $348.29, for a total transaction of $11,494,614.87. Following the transaction, the insider owned 69,775 shares of the company's stock, valued at $24,301,934.75. The trade was a 32.11% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Thomas Seifert sold 12,500 shares of the company's stock in a transaction on Monday, October 19th. The shares were sold at an average price of $299.59, for a total transaction of $3,744,875.00. Following the completion of the sale, the chief financial officer owned 104,958 shares of the company's stock, valued at approximately $31,444,367.22. This trade represents a 10.64% decrease in their position. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders have sold 476,339 shares of company stock worth $143,439,267. Corporate insiders own 10.66% of the company's stock.

Institutional Trading of Cloudflare

A number of institutional investors have recently added to or reduced their stakes in the stock. Financial Management Professionals Inc. grew its holdings in Cloudflare by 6.1% during the third quarter. Financial Management Professionals Inc. now owns 623 shares of the company's stock valued at $216,000 after purchasing an additional 36 shares during the last quarter. Armstrong Advisory Group Inc. boosted its holdings in shares of Cloudflare by 31.2% during the 3rd quarter. Armstrong Advisory Group Inc. now owns 164 shares of the company's stock worth $57,000 after buying an additional 39 shares during the period. CX Institutional boosted its holdings in shares of Cloudflare by 49.4% during the 2nd quarter. CX Institutional now owns 133 shares of the company's stock worth $33,000 after buying an additional 44 shares during the period. Wedbush Securities Inc. boosted its holdings in shares of Cloudflare by 4.2% during the 3rd quarter. Wedbush Securities Inc. now owns 1,095 shares of the company's stock worth $380,000 after buying an additional 44 shares during the period. Finally, Wealth Architects LLC grew its stake in Cloudflare by 4.6% in the 2nd quarter. Wealth Architects LLC now owns 1,022 shares of the company's stock valued at $251,000 after buying an additional 45 shares during the last quarter. Hedge funds and other institutional investors own 82.68% of the company's stock.

Trending Headlines about Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Cloud stocks are rebounding: Cloudflare is benefiting from a broader recovery in cloud-software shares, with investors especially favoring companies that secure and keep applications running. Cloudflare Climbs as Cloud Stocks Rebound
• Positive Sentiment: PHP security crisis highlights demand for Cloudflare: The company reported millions of attempted exploits after critical PHP vulnerabilities were disclosed. The heightened threat environment reinforces the need for Cloudflare’s web-security and protective services and has helped lift cybersecurity stocks. Cloudflare sees millions of exploit attempts after PHP disclosure
• Positive Sentiment: Growth outlook remains attractive to some investors: Brown Advisory cited accelerating growth at Cloudflare, while a bullish analyst view argued that AI-driven traffic, bot verification, and enterprise adoption could provide substantial long-term expansion opportunities. Brown Advisory Sees Accelerating Growth at Cloudflare
• Neutral Sentiment: Valuation is a key risk: Cloudflare’s multiyear share-price gains have significantly outpaced its sales growth, leaving the stock valued at a rich sales premium. That can support momentum but makes the shares sensitive to any slowdown in growth or weaker guidance. Cloudflare Stock May Trade at a Rich Sales Premium
• Negative Sentiment: Execution concerns remain: Commentary has pointed to potentially misleading AI-agent enthusiasm, declining gross margins, and a reported workforce reduction, factors that could temper the bullish narrative if they pressure profitability or revenue quality. PHP Flaws Set Off Cyber Alarm

About Cloudflare

Cloudflare, Inc NYSE: NET provides cloud connectivity, security and performance services for websites, applications, corporate networks and other internet-connected resources. Its global network is designed to help organizations improve the reliability, speed and security of digital services while reducing the complexity of managing internet infrastructure.

The company's offerings include content delivery and authoritative domain name system services, distributed denial-of-service protection, web application and application programming interface security, bot management, and network security tools.

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