Cloudflare (NYSE:NET) Sees Large Volume Increase - Should You Buy?

Key Points

• Stock movement: Cloudflare traded 4.84 million shares (up ~5% from the prior session) and slid to $169.17 from a $193.05 close, with the drop tied to a sectorwide AI infrastructure sell‑off, geopolitical volatility and flow‑driven selling rather than a single new company catalyst.
• Fundamentals and analyst view: The company beat revenue and EPS estimates—revenue was up 33.6% year‑over‑year and EPS was $0.28—but it still reports negative net margins and a negative PE, while analysts remain mixed overall (MarketBeat average rating "Moderate Buy" with an average target of $233.38).
• Insider selling and ownership: Significant insider sales (including the CEO’s Rule 10b5‑1 trades and ~624k insider shares sold in the past three months) could add short‑term pressure, even as institutional ownership is high (~82.7%).

Cloudflare, Inc. (NYSE:NET - Get Free Report) shares saw strong trading volume on Friday . 4,839,099 shares traded hands during trading, an increase of 5% from the previous session's volume of 4,615,764 shares.The stock last traded at $169.17 and had previously closed at $193.05.

Key Headlines Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Virtru launched object‑level data governance for Cloudflare R2, improving R2’s compliance/security appeal to enterprise customers and supporting incremental product monetization. Virtru brings object level governance to R2
• Positive Sentiment: Analyst commentary (e.g., TD Cowen and other brokers) continues to highlight Cloudflare’s edge‑computing and security positioning, strong top‑line momentum and improved cash metrics — supportive for medium/long‑term valuation. Are Cloudflare’s AI security prospects brighter?
• Neutral Sentiment: Some market writeups list NET among names “holding up” versus peers or as potential dip buys; useful for momentum traders but not new company fundamentals. Five stocks not breaking down
• Neutral Sentiment: Quant/market‑structure notes flag no single fresh catalyst for the drop — pointing instead to valuation sensitivity, crowded long positioning and broad risk‑off dynamics; this implies the move may be amplified by flows rather than fundamentals. QuiverQuant analysis
• Negative Sentiment: Sectorwide “AI infrastructure” sell‑off and fears that advanced AI/agent developments will compress future SaaS multiples have put pressure on software names including Cloudflare. AI infrastructure sell‑off
• Negative Sentiment: Cloudflare was called out as a leader in the broader software sell‑off as AI fears hit the sector, extending downward pressure on NET. Cloudflare leads software sell‑off
• Negative Sentiment: Insider selling: CEO Matthew Prince executed several Rule 10b5‑1 sales (recent filings show ~104k shares across April transactions), which—despite being planned—can create short‑term selling pressure and negative headlines. SEC Form 4
• Negative Sentiment: Macroeconomic/geopolitical volatility amplified selling: spikes in risk aversion tied to a reported ceasefire breach raised session‑wide volatility and hit high‑beta software stocks. Market volatility from geopolitical news

Wall Street Analysts Forecast Growth

Several equities research analysts have recently issued reports on the company. Zacks Research upgraded Cloudflare from a "strong sell" rating to a "hold" rating in a report on Friday, March 13th. Barclays raised their price objective on Cloudflare from $235.00 to $250.00 and gave the stock an "overweight" rating in a report on Wednesday, February 11th. New Street Research set a $140.00 price objective on Cloudflare in a report on Wednesday, February 11th. Guggenheim raised their price objective on Cloudflare from $117.00 to $140.00 and gave the stock a "sell" rating in a report on Wednesday, February 11th. Finally, Royal Bank Of Canada lifted their target price on Cloudflare from $230.00 to $240.00 and gave the company an "outperform" rating in a report on Wednesday, February 11th. One research analyst has rated the stock with a Strong Buy rating, eighteen have assigned a Buy rating, eight have issued a Hold rating and two have given a Sell rating to the company. According to MarketBeat, Cloudflare has an average rating of "Moderate Buy" and an average price target of $233.38.

Cloudflare Stock Performance

The stock has a 50-day simple moving average of $194.79 and a 200-day simple moving average of $202.42. The company has a debt-to-equity ratio of 1.35, a current ratio of 1.98 and a quick ratio of 1.98. The stock has a market cap of $59.67 billion, a PE ratio of -586.90 and a beta of 1.87.

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

Insider Buying and Selling at Cloudflare

In other news, CFO Thomas J. Seifert sold 41,557 shares of Cloudflare stock in a transaction dated Friday, February 20th. The stock was sold at an average price of $185.04, for a total transaction of $7,689,707.28. Following the sale, the chief financial officer directly owned 85,452 shares of the company's stock, valued at approximately $15,812,038.08. The trade was a 32.72% decrease in their ownership of the stock. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which can be accessed through this hyperlink. Also, insider Michelle Zatlyn sold 35,080 shares of Cloudflare stock in a transaction dated Thursday, February 19th. The stock was sold at an average price of $187.39, for a total value of $6,573,641.20. Following the sale, the insider directly owned 34,514 shares in the company, valued at approximately $6,467,578.46. The trade was a 50.41% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold 624,247 shares of company stock valued at $121,102,467 over the last three months. 10.89% of the stock is owned by company insiders.

Institutional Trading of Cloudflare

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Purpose Unlimited Inc. purchased a new stake in shares of Cloudflare during the fourth quarter worth about $721,000. Stance Capital LLC increased its holdings in Cloudflare by 10.7% in the fourth quarter. Stance Capital LLC now owns 6,721 shares of the company's stock valued at $1,325,000 after buying an additional 650 shares during the last quarter. Osbon Capital Management LLC bought a new stake in Cloudflare in the fourth quarter valued at about $2,456,000. Fund Advisors of America Inc FL bought a new stake in Cloudflare in the fourth quarter valued at about $1,900,000. Finally, Spear Advisors LLC bought a new stake in Cloudflare in the fourth quarter valued at about $5,844,000. 82.68% of the stock is owned by hedge funds and other institutional investors.

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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