Cloudflare (NYSE:NET) Upgraded at Zacks Research

Key Points

• Zacks Research upgraded Cloudflare from “strong sell” to “hold.”
• Analyst sentiment overall is more positive: 24 analysts rate NET a Buy, eight a Hold and five a Sell, for a “Moderate Buy” consensus and an average price target of $333.21.
• Cloudflare’s latest reported quarter beat estimates, with earnings per share of $0.29 versus $0.27 expected and revenue of $696.1 million, up 35.9% year over year.

Cloudflare (NYSE:NET - Get Free Report) was upgraded by equities research analysts at Zacks Research from a "strong sell" rating to a "hold" rating in a note issued to investors on Tuesday, Zacks reports.

NET has been the subject of several other reports. Sanford C. Bernstein boosted their target price on Cloudflare from $181.00 to $245.00 and gave the stock a "market perform" rating in a research note on Thursday, October 29th. Cantor Fitzgerald restated a "neutral" rating and set a $340.00 target price on shares of Cloudflare in a research note on Monday, October 5th. Wells Fargo & Company lifted their price target on shares of Cloudflare from $380.00 to $400.00 and gave the stock an "overweight" rating in a research note on Wednesday, October 28th. Deutsche Bank Aktiengesellschaft raised shares of Cloudflare to a "buy" rating in a research report on Tuesday, July 7th. Finally, Raymond James Financial lowered shares of Cloudflare from a "strong-buy" rating to an "underperform" rating in a report on Tuesday. Twenty-four equities research analysts have rated the stock with a Buy rating, eight have issued a Hold rating and five have issued a Sell rating to the company's stock. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus target price of $333.21.

Cloudflare Trading Down 2.6%

NYSE NET opened at $266.54 on Tuesday. The firm has a 50 day simple moving average of $319.83 and a 200-day simple moving average of $249.01. The company has a debt-to-equity ratio of 1.22, a current ratio of 1.82 and a quick ratio of 1.82. Cloudflare has a one year low of $158.83 and a one year high of $370.35.

Cloudflare (NYSE:NET - Get Free Report) last posted its quarterly earnings data on Thursday, August 6th. The company reported $0.29 earnings per share for the quarter, topping analysts' consensus estimates of $0.27 by $0.02. The business had revenue of $696.06 million for the quarter, compared to analyst estimates of $664.66 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 35.9% on a year-over-year basis. During the same quarter in the prior year, the company earned $0.21 earnings per share. As a group, equities analysts forecast that Cloudflare will post 0.03 earnings per share for the current year.

Insider Activity at Cloudflare

In related news, CFO Thomas J. Seifert sold 12,500 shares of the firm's stock in a transaction dated Monday, October 19th. The stock was sold at an average price of $299.59, for a total transaction of $3,744,875.00. Following the transaction, the chief financial officer owned 104,958 shares of the company's stock, valued at $31,444,367.22. This trade represents a 10.64% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Carl Ledbetter sold 5,000 shares of the company's stock in a transaction that occurred on Monday, September 14th. The stock was sold at an average price of $312.22, for a total value of $1,561,100.00. Following the sale, the director owned 878,073 shares of the company's stock, valued at $274,151,952.06. This trade represents a 0.57% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 259,057 shares of company stock valued at $79,516,905 over the last three months. 10.66% of the stock is owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors and hedge funds have recently made changes to their positions in the company. Jennison Associates LLC grew its stake in Cloudflare by 135.8% in the 1st quarter. Jennison Associates LLC now owns 4,394,484 shares of the company's stock valued at $906,758,000 after acquiring an additional 2,530,872 shares during the last quarter. Amundi increased its holdings 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 acquiring an additional 32,804 shares in the last quarter. Sumitomo Mitsui Trust Group Inc. increased its holdings 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 valued at $363,537,000 after acquiring an additional 48,956 shares in the last quarter. National Pension Service raised its position in Cloudflare by 1.6% during the second quarter. National Pension Service now owns 959,987 shares of the company's stock worth $235,466,000 after acquiring an additional 15,546 shares during the last quarter. Finally, Swiss National Bank raised its position in Cloudflare by 8.1% during the first quarter. Swiss National Bank now owns 927,200 shares of the company's stock worth $191,318,000 after acquiring an additional 69,800 shares during the last quarter. 82.68% of the stock is currently owned by institutional investors and hedge funds.

Key Stories Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: JPMorgan upgraded Cloudflare from Neutral to Overweight after the recent selloff, arguing the decline has improved the risk-reward and that revenue growth could accelerate. The bank set a $350 price target. JPMorgan upgrades Cloudflare to Overweight
• Positive Sentiment: A Polen Capital investor letter pointed to accelerating revenue growth and a raised outlook as reasons for an outperform view on NET, offering a constructive long-term growth perspective. Cloudflare shares outperform following accelerating revenue growth and raised outlook
• Neutral Sentiment: Cloudflare’s upcoming Q3 results are the key near-term catalyst. The earnings preview coverage highlights the report and investor focus on what comes next for NET, but provides no results yet. Cloudflare reports Q3 results tomorrow
• Negative Sentiment: Valuation remains a concern ahead of earnings. NET has retreated from its October high, while reported insider selling and options-market signals point to caution about a possible post-earnings decline. Insiders sell as options market points to a drop after earnings
• Negative Sentiment: Jefferies lowered its price target to $320 from $350, reflecting a more cautious outlook even though the revised target remains above the price cited in the coverage. Jefferies lowers Cloudflare price target

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.