Cloudflare (NYSE:NET) Stock Rating Upgraded by Zacks Research

Key Points

• Zacks Research upgraded Cloudflare from “hold” to “strong-buy,” adding to a generally positive analyst backdrop for the stock.
• Despite the upgrade, analyst opinions remain mixed: the consensus rating is still “Moderate Buy” with a consensus price target of $258.59, while some firms like Weiss Ratings still have a sell view.
• Cloudflare reported better-than-expected quarterly results, with EPS of $0.25 vs. $0.23 expected and revenue rising 33.5% year over year, though insiders have recently sold shares and the stock is trading near its 52-week high.

Cloudflare (NYSE:NET - Get Free Report) was upgraded by research analysts at Zacks Research from a "hold" rating to a "strong-buy" rating in a research report issued on Monday,Zacks.com reports.

A number of other research analysts have also issued reports on NET. Weiss Ratings reiterated a "sell (d-)" rating on shares of Cloudflare in a research report on Friday. Susquehanna upped their price objective on shares of Cloudflare from $190.00 to $200.00 and gave the stock a "neutral" rating in a research report on Monday, May 11th. UBS Group increased their price objective on shares of Cloudflare from $220.00 to $250.00 and gave the company a "neutral" rating in a report on Wednesday, June 10th. Citigroup reissued a "market outperform" rating on shares of Cloudflare in a research note on Monday. Finally, Morgan Stanley upped their price target on shares of Cloudflare from $305.00 to $322.00 and gave the stock an "overweight" rating in a research report on Friday, July 17th. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-two have issued a Buy rating, six have issued a Hold rating and four have assigned a Sell rating to the stock. According to data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and a consensus target price of $258.59.

Cloudflare Price Performance

Shares of NYSE NET opened at $272.50 on Monday. The company has a debt-to-equity ratio of 1.29, a current ratio of 1.96 and a quick ratio of 1.96. The stock has a market capitalization of $96.32 billion, a price-to-earnings ratio of -1,090.02, a PEG ratio of 277.66 and a beta of 1.67. The firm's 50 day simple moving average is $239.64 and its 200-day simple moving average is $211.05. Cloudflare has a 12 month low of $158.83 and a 12 month high of $291.00.

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

Insider Buying and Selling

In other news, CEO Matthew Prince sold 52,383 shares of Cloudflare stock in a transaction on Monday, July 6th. The stock was sold at an average price of $247.28, for a total transaction of $12,953,268.24. The transaction was disclosed in a document filed with the SEC, which is available at this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Michelle Zatlyn sold 25,641 shares of the business's stock in a transaction dated Thursday, June 18th. The shares were sold at an average price of $219.11, for a total transaction of $5,618,199.51. Following the transaction, the insider directly owned 47,425 shares in the company, valued at approximately $10,391,291.75. The trade was a 35.09% decrease in their position. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders sold 564,903 shares of company stock worth $127,356,194 over the last quarter. Corporate insiders own 10.66% of the company's stock.

Institutional Trading of Cloudflare

Several institutional investors have recently made changes to their positions in the company. Envestnet Portfolio Solutions Inc. lifted its holdings in Cloudflare by 11.4% in the second quarter. Envestnet Portfolio Solutions Inc. now owns 7,229 shares of the company's stock valued at $1,773,000 after acquiring an additional 738 shares during the last quarter. Physician Wealth Advisors Inc. lifted its stake in shares of Cloudflare by 46.9% in the 2nd quarter. Physician Wealth Advisors Inc. now owns 191 shares of the company's stock valued at $47,000 after purchasing an additional 61 shares during the last quarter. Oak Thistle LLC purchased a new position in shares of Cloudflare during the 2nd quarter worth $2,208,000. IFP Advisors Inc increased its position in shares of Cloudflare by 5.4% during the 2nd quarter. IFP Advisors Inc now owns 6,485 shares of the company's stock worth $1,591,000 after purchasing an additional 331 shares during the last quarter. Finally, Gateway Investment Advisers LLC acquired a new stake in shares of Cloudflare during the 2nd quarter worth about $1,450,000. Hedge funds and other institutional investors 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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