Cloudflare (NYSE:NET) Trading Down 4.1% - Should You Sell?

Key Points

• Cloudflare's stock price fell by 4.1% during mid-day trading, reaching a low of $211.54 before closing at $210.23, with a significant drop in trading volume.
• Equities analysts have been bullish on Cloudflare, with several raising their price targets, including Needham & Company LLC increasing their target from $200 to $240 and maintaining a "buy" rating.
• Insider trading activity showed significant sales, with CEO Matthew Prince and co-founder Michelle Zatlyn selling a combined total of over $16 million in stock recently.

Cloudflare, Inc. (NYSE:NET - Get Free Report) shares fell 4.1% on Wednesday . The stock traded as low as $211.54 and last traded at $210.23. 900,259 shares traded hands during mid-day trading, a decline of 74% from the average session volume of 3,456,087 shares. The stock had previously closed at $219.24.

Analysts Set New Price Targets

NET has been the topic of a number of research analyst reports. Piper Sandler increased their price objective on shares of Cloudflare from $151.00 to $224.00 and gave the stock a "neutral" rating in a research report on Friday, August 1st. Robert W. Baird upped their price target on Cloudflare from $148.00 to $175.00 and gave the stock a "neutral" rating in a research note on Friday, July 25th. Wells Fargo & Company raised their price objective on Cloudflare from $225.00 to $250.00 and gave the company an "overweight" rating in a research note on Friday, August 1st. Guggenheim boosted their price objective on Cloudflare from $70.00 to $111.00 and gave the company a "sell" rating in a report on Friday, August 1st. Finally, Scotiabank increased their target price on Cloudflare from $135.00 to $200.00 and gave the stock a "sector perform" rating in a report on Friday, August 1st. One analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating, nine have issued a Hold rating and three have issued a Sell rating to the stock. According to MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average target price of $191.28.

Cloudflare Trading Up 1.3%

The company has a quick ratio of 5.14, a current ratio of 5.14 and a debt-to-equity ratio of 2.63. The firm has a 50 day moving average price of $204.65 and a 200 day moving average price of $164.83. The stock has a market capitalization of $78.89 billion, a PE ratio of -665.82 and a beta of 1.95.

Cloudflare (NYSE:NET - Get Free Report) last announced its earnings results on Thursday, July 31st. The company reported $0.21 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.18 by $0.03. The company had revenue of $512.32 million for the quarter, compared to analysts' expectations of $501.58 million. Cloudflare had a negative return on equity of 8.42% and a negative net margin of 6.22%.Cloudflare's quarterly revenue was up 27.8% on a year-over-year basis. During the same quarter in the previous year, the firm earned $0.20 earnings per share. Cloudflare has set its FY 2025 guidance at 0.850-0.860 EPS. Q3 2025 guidance at 0.230-0.23 EPS. Equities analysts expect that Cloudflare, Inc. will post -0.11 EPS for the current fiscal year.

Insider Transactions at Cloudflare

In other news, Director Carl Ledbetter sold 15,000 shares of the stock in a transaction dated Monday, August 25th. The shares were sold at an average price of $195.73, for a total value of $2,935,950.00. Following the completion of the sale, the director owned 1,028,073 shares in the company, valued at $201,224,728.29. This represents a 1.44% decrease in their ownership of the stock. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, CEO Matthew Prince sold 52,384 shares of the firm's stock in a transaction dated Thursday, September 11th. The shares were sold at an average price of $226.46, for a total transaction of $11,862,880.64. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 665,738 shares of company stock worth $131,968,542. 10.89% of the stock is owned by insiders.

Hedge Funds Weigh In On Cloudflare

A number of hedge funds and other institutional investors have recently modified their holdings of the business. Twin Peaks Wealth Advisors LLC bought a new position in shares of Cloudflare in the second quarter valued at approximately $29,000. Quaker Wealth Management LLC boosted its position in Cloudflare by 218.6% in the second quarter. Quaker Wealth Management LLC now owns 166 shares of the company's stock worth $33,000 after purchasing an additional 306 shares during the last quarter. Hilltop National Bank purchased a new position in Cloudflare in the second quarter worth $36,000. Ameritas Advisory Services LLC bought a new position in Cloudflare in the 2nd quarter valued at $39,000. Finally, Mather Group LLC. grew its stake in Cloudflare by 1,188.2% in the 1st quarter. Mather Group LLC. now owns 219 shares of the company's stock valued at $25,000 after purchasing an additional 202 shares during the period. Hedge funds and other institutional investors own 82.68% of the company's stock.

About Cloudflare

Cloudflare, Inc operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices; and website and application security products comprising web application firewall, bot management, distributed denial of service, API gateways, SSL/TLS encryption, script management, security center, and rate limiting products.