Cloudflare, Inc. (NYSE:NET) Receives Consensus Recommendation of "Moderate Buy" from Analysts

Key Points

• Analysts rate Cloudflare a "Moderate Buy" — 30 brokerages cover the stock (19 buy, 7 hold, 3 sell, 1 strong buy) with an average 12‑month price target of about $232.62.
• Cloudflare beat its last quarter's estimates with $0.28 EPS vs $0.27 expected and $614.5M revenue (up 33.6% YoY), but the business remains unprofitable with a negative net margin and negative return on equity.
• Significant insider selling has occurred recently — insiders disposed of 616,104 shares (~$120.5M) in the past three months, including pre‑arranged Rule 10b5‑1 sales by Michelle Zatlyn and director Carl Ledbetter.

Shares of Cloudflare, Inc. (NYSE:NET - Get Free Report) have been assigned an average rating of "Moderate Buy" from the thirty brokerages that are presently covering the stock, Marketbeat Ratings reports. Three analysts have rated the stock with a sell rating, seven have issued a hold rating, nineteen have assigned a buy rating and one has given a strong buy rating to the company. The average 12-month price target among brokerages that have updated their coverage on the stock in the last year is $232.6154.

Several research analysts recently weighed in on the company. Robert W. Baird set a $260.00 price objective on Cloudflare and gave the stock an "outperform" rating in a research report on Wednesday, February 11th. Piper Sandler upgraded Cloudflare from a "neutral" rating to an "overweight" rating and set a $222.00 price target for the company in a research report on Tuesday, April 14th. New Street Research set a $140.00 price objective on Cloudflare in a research note on Wednesday, February 11th. Barclays lifted their price objective on Cloudflare from $235.00 to $250.00 and gave the company an "overweight" rating in a research note on Wednesday, February 11th. Finally, Wells Fargo & Company lifted their price objective on Cloudflare from $265.00 to $270.00 and gave the company an "overweight" rating in a research note on Wednesday, February 11th.

Cloudflare Trading Up 0.1%

Shares of Cloudflare stock opened at $217.82 on Monday. The firm has a market capitalization of $76.67 billion, a price-to-earnings ratio of -751.07 and a beta of 1.67. Cloudflare has a fifty-two week low of $120.46 and a fifty-two week high of $260.00. The company has a debt-to-equity ratio of 1.35, a quick ratio of 1.98 and a current ratio of 1.98. The stock has a 50 day moving average of $199.89 and a 200 day moving average of $200.05.

Cloudflare (NYSE:NET - Get Free Report) last issued its quarterly earnings data on Tuesday, February 10th. The company reported $0.28 earnings per share for the quarter, topping the consensus estimate of $0.27 by $0.01. The company had revenue of $614.51 million during the quarter, compared to analyst estimates of $591.67 million. Cloudflare had a negative return on equity of 7.24% and a negative net margin of 4.72%.The firm's revenue for the quarter was up 33.6% compared to the same quarter last year. During the same period in the prior year, the business posted $0.19 earnings per share. As a group, research analysts predict that Cloudflare will post -0.11 earnings per share for the current year.

Insiders Place Their Bets

In other news, insider Michelle Zatlyn sold 25,641 shares of Cloudflare stock in a transaction on Wednesday, April 22nd. The stock was sold at an average price of $209.15, for a total value of $5,362,815.15. Following the completion of the sale, the insider directly owned 34,514 shares of the company's stock, valued at approximately $7,218,603.10. The trade was a 42.62% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Carl Ledbetter sold 9,991 shares of Cloudflare stock in a transaction on Tuesday, April 28th. The shares were sold at an average price of $215.85, for a total value of $2,156,557.35. Following the completion of the sale, the director directly owned 928,082 shares of the company's stock, valued at $200,326,499.70. The trade was a 1.07% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last three months, insiders sold 616,104 shares of company stock valued at $120,517,852. Insiders own 10.89% of the company's stock.

Institutional Investors Weigh In On Cloudflare

Institutional investors have recently modified their holdings of the company. Physician Wealth Advisors Inc. grew its stake in shares of Cloudflare by 693.3% in the third quarter. Physician Wealth Advisors Inc. now owns 119 shares of the company's stock valued at $26,000 after buying an additional 104 shares in the last quarter. Wiser Advisor Group LLC purchased a new position in Cloudflare in the third quarter valued at $26,000. HM Payson & Co. purchased a new position in Cloudflare in the fourth quarter valued at $25,000. Westside Investment Management Inc. boosted its holdings in Cloudflare by 100.0% in the third quarter. Westside Investment Management Inc. now owns 130 shares of the company's stock valued at $28,000 after purchasing an additional 65 shares during the period. Finally, ORG Wealth Partners LLC boosted its holdings in Cloudflare by 101.4% in the third quarter. ORG Wealth Partners LLC now owns 139 shares of the company's stock valued at $30,000 after purchasing an additional 70 shares during the period. 82.68% of the stock is owned by institutional investors and hedge funds.

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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