Cloudflare (NYSE:NET) Raised to "Sector Outperform" at Scotiabank

Key Points

• Scotiabank upgraded Cloudflare from “sector perform” to “sector outperform” and raised its price target to $300 from $225, implying about 21% upside from the prior close.
• Analyst sentiment remains mixed overall, but broadly positive: Cloudflare has 22 Buy ratings, six Holds, and three Sells, with a consensus rating of Moderate Buy and a consensus target of $244.23.
• Cloudflare recently beat earnings expectations, reporting $0.25 EPS on $639.75 million in revenue, while revenue rose 33.5% year over year; the stock opened at $247.46 on Tuesday, near its 52-week high.

Cloudflare (NYSE:NET - Get Free Report) was upgraded by investment analysts at Scotiabank from a "sector perform" rating to a "sector outperform" rating in a note issued to investors on Tuesday,Benzinga reports. The firm currently has a $300.00 price objective on the stock, up from their previous price objective of $225.00. Scotiabank's price target would suggest a potential upside of 21.23% from the company's previous close.

Other research analysts have also issued research reports about the company. Barclays reiterated an "overweight" rating and issued a $250.00 target price on shares of Cloudflare in a research report on Monday, June 1st. The Goldman Sachs Group cut Cloudflare from a "buy" rating to a "sell" rating in a report on Wednesday, April 15th. New Street Research reaffirmed a "market outperform" rating on shares of Cloudflare in a report on Monday, June 15th. BTIG Research increased their price target on Cloudflare from $243.00 to $269.00 and gave the company a "buy" rating in a research note on Wednesday, June 10th. Finally, Sanford C. Bernstein reaffirmed a "market perform" rating and issued a $136.00 price objective on shares of Cloudflare in a research note on Wednesday, June 10th. Twenty-two investment analysts have rated the stock with a Buy rating, six have assigned a Hold rating and three have given a Sell rating to the company's stock. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and a consensus price target of $244.23.

Cloudflare Price Performance

NET stock opened at $247.46 on Tuesday. The company has a quick ratio of 1.96, a current ratio of 1.96 and a debt-to-equity ratio of 1.29. Cloudflare has a one year low of $158.83 and a one year high of $276.82. The company has a 50 day moving average price of $226.93 and a two-hundred day moving average price of $205.29.

Cloudflare (NYSE:NET - Get Free Report) last posted its quarterly earnings results on Thursday, May 7th. The company reported $0.25 earnings per share for the quarter, topping analysts' consensus estimates of $0.23 by $0.02. Cloudflare had a negative net margin of 3.72% and a negative return on equity of 5.65%. The company had revenue of $639.75 million for the quarter, compared to the consensus estimate of $620.83 million. During the same quarter last year, the firm posted $0.16 earnings per share. Cloudflare's revenue was up 33.5% on a year-over-year basis. Cloudflare has set its FY 2026 guidance at 1.190-1.200 EPS and its Q2 2026 guidance at 0.270-0.270 EPS. As a group, sell-side analysts forecast that Cloudflare will post 0.02 EPS for the current fiscal year.

Insider Activity at Cloudflare

In other Cloudflare news, CFO Thomas J. Seifert sold 10,000 shares of the company's stock in a transaction that occurred on Wednesday, June 17th. The stock was sold at an average price of $232.39, for a total value of $2,323,900.00. Following the completion of the transaction, the chief financial officer owned 116,733 shares of the company's stock, valued at $27,127,581.87. This represents a 7.89% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Mark J. Hawkins sold 133 shares of Cloudflare stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $249.00, for a total transaction of $33,117.00. Following the sale, the director owned 10,765 shares in the company, valued at approximately $2,680,485. This trade represents a 1.22% 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 sold 671,049 shares of company stock valued at $149,042,468 in the last quarter. Company insiders own 10.66% of the company's stock.

Institutional Investors Weigh In On Cloudflare

Several institutional investors have recently modified their holdings of NET. Vanguard Group Inc. increased its position in shares of Cloudflare by 0.3% during the fourth quarter. Vanguard Group Inc. now owns 32,407,646 shares of the company's stock worth $6,389,167,000 after acquiring an additional 90,397 shares in the last quarter. Geode Capital Management LLC raised its holdings in shares of Cloudflare by 4.2% in the 4th quarter. Geode Capital Management LLC now owns 6,018,175 shares of the company's stock valued at $1,184,044,000 after purchasing an additional 241,981 shares during the period. Jennison Associates LLC raised 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 period. First Trust Advisors LP increased its holdings in shares of Cloudflare by 1.6% in the fourth quarter. First Trust Advisors LP now owns 4,019,157 shares of the company's stock valued at $792,377,000 after purchasing an additional 63,198 shares during the last quarter. Finally, Invesco Ltd. boosted its holdings in shares of Cloudflare by 1.3% during the 3rd quarter. Invesco Ltd. now owns 3,964,733 shares of the company's stock worth $850,792,000 after buying an additional 49,485 shares during the period. Institutional investors and hedge funds 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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