Cloudflare (NYSE:NET) Earns Overweight Rating from Piper Sandler

Key Points

• Piper Sandler reiterated its Overweight rating on Cloudflare and raised its price target from $333 to $337, implying about 38% upside from the stock’s current price.
• Analyst sentiment is broadly positive: 25 analysts rate the stock Buy, eight Hold and four Sell, for a consensus Moderate Buy rating and an average target of $333.75.
• Cloudflare beat Q3 earnings and revenue expectations, with revenue up 39.2% year over year, and raised its full-year revenue outlook. However, falling gross margin and a widening GAAP operating loss remain profitability concerns.

Cloudflare (NYSE:NET - Get Free Report)'s stock had its "overweight" rating restated by equities research analysts at Piper Sandler in a report issued on Friday, Benzinga reports. They presently have a $337.00 target price on the stock, up from their prior target price of $333.00. Piper Sandler's price objective would suggest a potential upside of 38.23% from the stock's current price.

A number of other research analysts have also recently weighed in on the stock. Craig Hallum raised shares of Cloudflare to a "buy" rating in a research report on Tuesday. Barclays raised their target price on shares of Cloudflare from $355.00 to $400.00 and gave the company an "overweight" rating in a research note on Monday, October 12th. UBS Group assumed coverage on shares of Cloudflare in a report on Tuesday. They set a "buy" rating on the stock. Morgan Stanley began coverage on shares of Cloudflare in a research report on Tuesday. They set an "overweight" rating for the company. Finally, JPMorgan Chase & Co. upgraded Cloudflare from a "neutral" rating to an "overweight" rating and set a $350.00 price target for the company in a report on Tuesday. Twenty-five equities research analysts have rated the stock with a Buy rating, eight have given a Hold rating and four have issued a Sell rating to the company's stock. According to MarketBeat.com, the stock has an average rating of "Moderate Buy" and a consensus target price of $333.75.

Cloudflare Stock Performance

Shares of NYSE:NET opened at $243.79 on Friday. The firm has a market capitalization of $86.17 billion, a PE ratio of -420.32, a P/E/G ratio of 206.44 and a beta of 1.37. The company has a debt-to-equity ratio of 1.22, a current ratio of 1.82 and a quick ratio of 1.82. The business has a 50-day moving average of $319.02 and a two-hundred day moving average of $249.31. Cloudflare has a 12 month low of $158.83 and a 12 month high of $370.35.

Cloudflare (NYSE:NET - Get Free Report) last released its quarterly earnings data on Thursday, November 5th. The company reported $0.38 earnings per share for the quarter, beating the consensus estimate of $0.34 by $0.04. The business had revenue of $782.51 million for the quarter, compared to analyst estimates of $737.16 million. Cloudflare had a negative return on equity of 3.88% and a negative net margin of 8.21%. The company's revenue was up 39.2% compared to the same quarter last year. During the same period in the previous year, the company posted $0.27 EPS. As a group, research analysts forecast that Cloudflare will post 0.03 earnings per share for the current year.

Insiders Place Their Bets

In other Cloudflare news, insider Michelle Zatlyn sold 33,003 shares of the company's stock in a transaction dated Tuesday, September 8th. The shares were sold at an average price of $277.43, for a total value of $9,156,022.29. Following the completion of the transaction, the insider directly owned 69,775 shares of the company's stock, valued at $19,357,678.25. This represents a 32.11% decrease in their position. The transaction was disclosed in a filing with the SEC, which is available at the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Thomas Seifert sold 12,500 shares of the firm's stock in a transaction dated Monday, October 19th. The shares were sold at an average price of $299.59, for a total value of $3,744,875.00. Following the sale, the chief financial officer owned 104,958 shares of the company's stock, valued at $31,444,367.22. This represents a 10.64% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold 259,057 shares of company stock worth $79,516,905 in the last quarter. 10.66% of the stock is owned by corporate insiders.

Institutional Investors Weigh In On Cloudflare

A number of hedge funds have recently bought and sold shares of the business. Jennison Associates LLC raised its position in shares of Cloudflare by 135.8% during the 1st quarter. Jennison Associates LLC now owns 4,394,484 shares of the company's stock worth $906,758,000 after purchasing an additional 2,530,872 shares during the period. Amundi boosted its position in Cloudflare by 2.0% during the 1st quarter. Amundi now owns 1,707,256 shares of the company's stock valued at $352,275,000 after purchasing an additional 32,804 shares during the period. Sumitomo Mitsui Trust Group Inc. grew its stake in Cloudflare by 4.9% during the 3rd quarter. Sumitomo Mitsui Trust Group Inc. now owns 1,046,812 shares of the company's stock worth $363,537,000 after buying an additional 48,956 shares during the last quarter. National Pension Service grew its stake in Cloudflare by 1.6% during the 2nd quarter. National Pension Service now owns 959,987 shares of the company's stock worth $235,466,000 after buying an additional 15,546 shares during the last quarter. Finally, Swiss National Bank increased its position in Cloudflare by 8.1% in the first quarter. Swiss National Bank now owns 927,200 shares of the company's stock worth $191,318,000 after buying an additional 69,800 shares during the period. Institutional investors and hedge funds own 82.68% of the company's stock.

Cloudflare News Summary

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Cloudflare reported Q3 revenue of $782.5 million, up 39.2% year over year and above analyst expectations. Adjusted EPS of $0.38 also beat consensus. Cloudflare Q3 results and guidance
• Positive Sentiment: The company raised its full-year revenue projection to about $2.96 billion from prior guidance of $2.86–$2.87 billion. Its next-quarter revenue outlook was also stronger than analysts expected. Cloudflare raises full-year outlook
• Positive Sentiment: Enterprise adoption continued to expand: customers spending more than $100,000 annually grew 25% year over year. Management also cited record sales productivity and the company’s first “Act 4” revenue. Three takeaways for long-term investors
• Neutral Sentiment: Needham kept a Buy rating but lowered its price target to $365 from $380; Cantor Fitzgerald cut its target to $310 from $340 and maintained Neutral. The target reductions temper, but do not erase, the positive earnings signal. Needham price target
• Negative Sentiment: Despite rapid sales growth, gross margin fell, free cash flow grew more slowly than revenue, and the GAAP operating loss widened—potential concerns about profitability and the quality of growth. Cloudflare sales, margins and earnings reaction

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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