Capelight Capital Asset Management LP Invests $8.87 Million in Cloudflare, Inc. $NET

Key Points

• Capelight Capital bought 45,000 shares (~$8.87 million) of Cloudflare in Q4, making the stock 7.3% of its portfolio and its second-largest holding.
• Q4 results beat estimates with revenue of $614.5M (+33.6% YoY) and EPS $0.28 vs. $0.27 expected, but Cloudflare remains unprofitable (net margin -4.72%) and analysts forecast FY EPS of -0.11.
• Insider sales totaled 572,965 shares (~$111.4M) over the past three months, while institutional ownership is ~82.7% and the MarketBeat consensus is a "Moderate Buy" with an average target of $232.62.

Capelight Capital Asset Management LP purchased a new position in Cloudflare, Inc. (NYSE:NET - Free Report) during the fourth quarter, according to its most recent disclosure with the Securities & Exchange Commission. The institutional investor purchased 45,000 shares of the company's stock, valued at approximately $8,872,000. Cloudflare comprises 7.3% of Capelight Capital Asset Management LP's portfolio, making the stock its 2nd biggest holding.

A number of other hedge funds have also modified their holdings of NET. Physician Wealth Advisors Inc. increased its stake in shares of Cloudflare by 693.3% in the third quarter. Physician Wealth Advisors Inc. now owns 119 shares of the company's stock worth $26,000 after acquiring an additional 104 shares during the last quarter. Wiser Advisor Group LLC acquired a new position in shares of Cloudflare in the third quarter worth $26,000. Westside Investment Management Inc. increased its stake in shares of Cloudflare by 100.0% in the third quarter. Westside Investment Management Inc. now owns 130 shares of the company's stock worth $28,000 after acquiring an additional 65 shares during the last quarter. ORG Wealth Partners LLC increased its stake in shares of Cloudflare by 101.4% in the third quarter. ORG Wealth Partners LLC now owns 139 shares of the company's stock worth $30,000 after acquiring an additional 70 shares during the last quarter. Finally, Wexford Capital LP acquired a new position in shares of Cloudflare in the third quarter worth $30,000. 82.68% of the stock is owned by institutional investors and hedge funds.

Cloudflare Trading Up 6.2%

Shares of NYSE:NET opened at $189.76 on Thursday. The stock has a market capitalization of $66.79 billion, a PE ratio of -654.32 and a beta of 1.87. Cloudflare, Inc. has a 1 year low of $100.25 and a 1 year high of $260.00. The firm has a fifty day moving average price of $195.25 and a 200 day moving average price of $201.15. The company has a current ratio of 1.98, a quick ratio of 1.98 and a debt-to-equity ratio of 1.35.

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

Insider Activity at Cloudflare

In other Cloudflare news, insider Michelle Zatlyn sold 25,641 shares of the company's stock in a transaction dated Thursday, March 5th. The shares were sold at an average price of $189.50, for a total transaction of $4,858,969.50. Following the completion of the sale, the insider directly owned 34,514 shares in the company, valued at $6,540,403. This represents a 42.62% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Mark J. Hawkins sold 133 shares of the company's stock in a transaction dated Wednesday, April 1st. The shares were sold at an average price of $209.60, for a total transaction of $27,876.80. Following the sale, the director owned 10,322 shares of the company's stock, valued at $2,163,491.20. This trade represents a 1.27% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last three months, insiders sold 572,965 shares of company stock valued at $111,409,912. 10.89% of the stock is owned by corporate insiders.

Wall Street Analyst Weigh In

NET has been the topic of a number of research reports. DZ Bank raised shares of Cloudflare from a "hold" rating to a "buy" rating and set a $215.00 price target on the stock in a research note on Friday, February 13th. Needham & Company LLC decreased their price objective on shares of Cloudflare from $285.00 to $250.00 and set a "buy" rating for the company in a report on Wednesday, February 11th. Susquehanna set a $190.00 price objective on shares of Cloudflare in a report on Thursday, February 12th. Barclays upped their price objective on shares of Cloudflare from $235.00 to $250.00 and gave the stock an "overweight" rating in a report on Wednesday, February 11th. Finally, TD Cowen reiterated a "buy" rating on shares of Cloudflare in a report on Tuesday, January 27th. One research analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, seven have issued a Hold rating and three have given a Sell rating to the company's stock. According to MarketBeat.com, Cloudflare presently has a consensus rating of "Moderate Buy" and an average target price of $232.62.

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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