Cloudflare (NYSE:NET) Trading 7.7% Higher - Time to Buy?

Key Points

• Shares jumped 7.7% mid-day to about $179.89 on Monday, though trading volume was below average (1.87M vs. a 4.72M average).
• Analysts are largely bullish — the consensus rating is a "Moderate Buy" with an average price target of $233.38 and several recent upgrades and higher targets from firms like RBC, BTIG and DZ Bank.
• Cloudflare beat the latest quarter's estimates with $614.5M revenue (+33.6% YoY) and $0.28 EPS, but the company remains unprofitable (negative net margin of 4.72% and negative ROE) while insiders have sold substantial stakes (624,247 shares worth ~$121.1M last quarter).

Shares of Cloudflare, Inc. (NYSE:NET - Get Free Report) traded up 7.7% during mid-day trading on Monday . The company traded as high as $179.25 and last traded at $179.8880. 1,869,060 shares were traded during trading, a decline of 60% from the average session volume of 4,715,809 shares. The stock had previously closed at $166.99.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on the stock. Royal Bank Of Canada upped their price target on shares of Cloudflare from $230.00 to $240.00 and gave the company an "outperform" rating in a report on Wednesday, February 11th. DZ Bank upgraded shares of Cloudflare from a "hold" rating to a "buy" rating and set a $215.00 price target for the company in a report on Friday, February 13th. Zacks Research upgraded shares of Cloudflare from a "strong sell" rating to a "hold" rating in a research note on Friday, March 13th. BTIG Research increased their target price on shares of Cloudflare from $199.00 to $243.00 and gave the company a "buy" rating in a research note on Wednesday, February 11th. Finally, Susquehanna set a $190.00 target price on shares of Cloudflare in a research note on Thursday, February 12th. One equities research analyst has rated the stock with a Strong Buy rating, eighteen have given a Buy rating, eight have assigned a Hold rating and two have given a Sell rating to the company's stock. According to MarketBeat.com, the stock presently has an average rating of "Moderate Buy" and an average price target of $233.38.

Cloudflare Trading Up 9.2%

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 company's 50 day moving average is $194.59 and its two-hundred day moving average is $201.74. The firm has a market cap of $64.21 billion, a P/E ratio of -628.70 and a beta of 1.87.

Cloudflare (NYSE:NET - Get Free Report) last released its earnings results on Tuesday, February 10th. The company reported $0.28 earnings per share for the quarter, beating the consensus estimate of $0.27 by $0.01. The business had revenue of $614.51 million during the quarter, compared to analysts' expectations of $591.67 million. Cloudflare had a negative net margin of 4.72% and a negative return on equity of 7.24%. The firm's revenue was up 33.6% on a year-over-year basis. During the same quarter last year, the company earned $0.19 earnings per share. On average, sell-side analysts predict that Cloudflare, Inc. will post -0.11 earnings per share for the current year.

Insiders Place Their Bets

In other Cloudflare news, CFO Thomas J. Seifert sold 41,557 shares of the firm's stock in a transaction dated Friday, February 20th. The shares were sold at an average price of $185.04, for a total transaction of $7,689,707.28. Following the completion of the transaction, the chief financial officer owned 85,452 shares in the company, valued at $15,812,038.08. This trade represents a 32.72% decrease in their ownership of the stock. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at this link. Also, CEO Matthew Prince sold 52,384 shares of the firm's stock in a transaction dated Tuesday, February 24th. The stock was sold at an average price of $164.15, for a total transaction of $8,598,833.60. Following the transaction, the chief executive officer owned 22,911 shares of the company's stock, valued at approximately $3,760,840.65. This represents a 69.57% decrease in their position. The disclosure for this sale is available in the SEC filing. Insiders sold a total of 624,247 shares of company stock worth $121,102,467 over the last quarter. Company insiders own 10.89% of the company's stock.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. HM Payson & Co. bought a new position in Cloudflare during the fourth quarter worth about $25,000. Physician Wealth Advisors Inc. increased its holdings in shares of Cloudflare by 693.3% during the third quarter. Physician Wealth Advisors Inc. now owns 119 shares of the company's stock worth $26,000 after buying an additional 104 shares in the last quarter. Wiser Advisor Group LLC acquired a new stake in shares of Cloudflare during the third quarter worth approximately $26,000. Westside Investment Management Inc. increased its holdings in shares of Cloudflare by 100.0% during the third quarter. Westside Investment Management Inc. now owns 130 shares of the company's stock worth $28,000 after buying an additional 65 shares in the last quarter. Finally, ORG Wealth Partners LLC increased its holdings in shares of Cloudflare by 101.4% during the third quarter. ORG Wealth Partners LLC now owns 139 shares of the company's stock worth $30,000 after buying an additional 70 shares in the last quarter. Institutional investors own 82.68% of the company's stock.

About Cloudflare

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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.