Cloudflare (NYSE:NET) Trading Down 4.1% - Here's Why

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)'s share price traded down 4.1% during mid-day trading on Wednesday . The stock traded as low as $211.54 and last traded at $210.23. 900,259 shares were traded during trading, a decline of 74% from the average session volume of 3,456,087 shares. The stock had previously closed at $219.24.

Analyst Ratings Changes

Several research analysts recently issued reports on the company. UBS Group lifted their price objective on Cloudflare from $145.00 to $200.00 and gave the stock a "neutral" rating in a research report on Thursday, July 24th. Stifel Nicolaus boosted their price target on Cloudflare from $175.00 to $230.00 and gave the company a "buy" rating in a report on Friday, August 1st. Robert W. Baird boosted their price target on Cloudflare from $148.00 to $175.00 and gave the company a "neutral" rating in a report on Friday, July 25th. DZ Bank reiterated a "sell" rating and issued a $170.00 price target on shares of Cloudflare in a report on Tuesday, July 22nd. Finally, Piper Sandler boosted their price target on Cloudflare from $151.00 to $224.00 and gave the company a "neutral" rating in a report on Friday, August 1st. One research analyst has rated the stock with a Strong Buy rating, fifteen have assigned a Buy rating, nine have issued a Hold rating and three have assigned a Sell rating to the company. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and an average target price of $191.28.

Cloudflare Trading Up 1.3%

The company has a debt-to-equity ratio of 2.63, a quick ratio of 5.14 and a current ratio of 5.14. The firm's 50-day moving average price is $204.65 and its 200 day moving average price is $165.07.

Cloudflare (NYSE:NET - Get Free Report) last released its quarterly earnings data on Thursday, July 31st. The company reported $0.21 earnings per share for the quarter, topping the consensus estimate of $0.18 by $0.03. The firm had revenue of $512.32 million for the quarter, compared to analyst estimates of $501.58 million. Cloudflare had a negative net margin of 6.22% and a negative return on equity of 8.42%. Cloudflare's quarterly revenue was up 27.8% on a year-over-year basis. During the same quarter in the prior year, the business 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. As a group, analysts anticipate that Cloudflare, Inc. will post -0.11 EPS for the current year.

Insider Activity at Cloudflare

In related news, CEO Matthew Prince sold 52,384 shares of the firm's stock in a transaction that occurred on Thursday, July 10th. The shares were sold at an average price of $184.58, for a total transaction of $9,669,038.72. Following the completion of the sale, the chief executive officer directly owned 381,213 shares in the company, valued at approximately $70,364,295.54. This trade represents a 12.08% decrease in their ownership of the stock. The sale was disclosed in a filing with the SEC, which is available at the SEC website. Also, insider Michelle Zatlyn sold 35,100 shares of the firm's stock in a transaction that occurred on Thursday, August 21st. The stock was sold at an average price of $191.71, for a total transaction of $6,729,021.00. Following the sale, the insider owned 14,575 shares of the company's stock, valued at $2,794,173.25. The trade was a 70.66% decrease in their ownership of the stock. The disclosure for this sale can be found here. Over the last three months, insiders have sold 665,738 shares of company stock valued at $131,968,542. Insiders own 10.89% of the company's stock.

Hedge Funds Weigh In On Cloudflare

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Orion Porfolio Solutions LLC boosted its stake in Cloudflare by 119.0% in the 2nd quarter. Orion Porfolio Solutions LLC now owns 13,957 shares of the company's stock worth $2,733,000 after purchasing an additional 7,585 shares during the period. MASTERINVEST Kapitalanlage GmbH acquired a new position in Cloudflare in the 2nd quarter worth approximately $1,568,000. Stance Capital LLC acquired a new position in Cloudflare in the 2nd quarter worth approximately $1,481,000. B. Riley Wealth Advisors Inc. acquired a new position in Cloudflare in the 2nd quarter worth approximately $581,000. Finally, Newbridge Financial Services Group Inc. boosted its stake in Cloudflare by 81.0% in the 2nd quarter. Newbridge Financial Services Group Inc. now owns 16,916 shares of the company's stock worth $3,313,000 after purchasing an additional 7,568 shares during the period. Institutional investors and hedge funds 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.