Wall Street Zen Downgrades Cloudflare (NYSE:NET) to Hold

Key Points

• Wall Street Zen downgraded Cloudflare from “Buy” to “Hold,” though the broader analyst consensus remains “Moderate Buy” with a $320.19 average price target.
• Cloudflare’s latest quarter exceeded expectations, with $0.29 EPS versus $0.27 expected and revenue of $696.06 million, up 35.9% year over year. Despite the growth, the company reported negative net margin and return on equity.
• Insiders sold 640,531 shares worth approximately $168.5 million over the past 90 days, while institutional investors remain major shareholders, owning 82.68% of the stock.

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

Other equities research analysts have also recently issued reports about the company. Weiss Ratings reissued a "sell (d-)" rating on shares of Cloudflare in a report on Friday, July 17th. Sanford C. Bernstein reiterated a "market perform" rating and issued a $136.00 price target on shares of Cloudflare in a research note on Wednesday, June 10th. Zacks Research downgraded shares of Cloudflare from a "strong-buy" rating to a "hold" rating in a report on Friday, August 14th. Royal Bank Of Canada lifted their target price on Cloudflare from $290.00 to $346.00 and gave the stock an "outperform" rating in a report on Friday, August 7th. Finally, Deutsche Bank Aktiengesellschaft raised Cloudflare to a "buy" rating in a research note on Tuesday, July 7th. One analyst has rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating, seven have given a Hold rating and four have given a Sell rating to the stock. Based on data from MarketBeat.com, the company presently has an average rating of "Moderate Buy" and a consensus price target of $320.19.

Cloudflare Trading Down 2.0%

NET opened at $278.88 on Friday. 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 $332.22. The firm has a market capitalization of $98.58 billion, a price-to-earnings ratio of -480.83, a PEG ratio of 228.00 and a beta of 1.66. The business has a 50 day simple moving average of $280.40 and a two-hundred day simple moving average of $235.13.

Cloudflare (NYSE:NET - Get Free Report) last announced its earnings results on Thursday, August 6th. The company reported $0.29 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.27 by $0.02. The company had revenue of $696.06 million during the quarter, compared to analyst estimates of $664.66 million. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The firm's quarterly revenue was up 35.9% compared to the same quarter last year. During the same period in the previous 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. Analysts predict that Cloudflare will post 0.03 EPS for the current year.

Insiders Place Their Bets

In related news, CFO Thomas J. Seifert sold 55,000 shares of the company's stock in a transaction on Tuesday, August 4th. The stock was sold at an average price of $300.30, for a total transaction of $16,516,500.00. Following the completion of the sale, the chief financial officer directly owned 113,790 shares in the company, valued at $34,171,137. This represents a 32.58% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Michelle Zatlyn sold 33,003 shares of the stock in a transaction that occurred on Wednesday, August 19th. The shares were sold at an average price of $294.63, for a total transaction of $9,723,673.89. Following the sale, the insider directly owned 69,775 shares of the company's stock, valued at $20,557,808.25. The trade was a 32.11% 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. Insiders have sold 640,531 shares of company stock worth $168,474,753 in the last ninety days. 10.66% of the stock is owned by company insiders.

Hedge Funds Weigh In On Cloudflare

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Lingotto Investment Management LLP acquired a new stake in shares of Cloudflare during the 4th quarter valued at about $34,626,000. Jupiter Asset Management Ltd. increased its stake in Cloudflare by 1,984.7% during the 4th quarter. Jupiter Asset Management Ltd. now owns 197,710 shares of the company's stock worth $38,979,000 after buying an additional 188,226 shares in the last quarter. Trek Financial LLC purchased a new stake in Cloudflare during the 4th quarter worth approximately $1,793,000. Pictet Asset Management Holding SA raised its holdings in shares of Cloudflare by 17.6% during the first quarter. Pictet Asset Management Holding SA now owns 1,381,985 shares of the company's stock valued at $284,900,000 after acquiring an additional 206,506 shares during the last quarter. Finally, Thrivent Financial for Lutherans purchased a new position in shares of Cloudflare in the fourth quarter valued at approximately $5,543,000. Hedge funds and other institutional investors own 82.68% of the company's stock.

Cloudflare Company Profile

Cloudflare, Inc is a global web infrastructure and security company that provides a suite of services designed to improve the performance, reliability and security of internet properties. Its core offerings include a content delivery network (CDN), distributed denial-of-service (DDoS) protection, managed DNS, and a web application firewall (WAF). Cloudflare also provides tools for bot management, SSL/TLS, load balancing and rate limiting to help organizations maintain uptime and protect web applications from attack.

In addition to traditional edge and security services, Cloudflare has expanded into edge computing and developer platforms.

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