Capital World Investors Sells 292,102 Shares of Cloudflare, Inc. $NET

Key Points

• Capital World Investors trimmed its stake in Cloudflare by 0.7% in Q3, selling 292,102 shares and leaving it with 40,515,386 shares — roughly a 11.57% ownership of the company valued at about $8.69 billion, making NET its 13th largest holding.
• Cloudflare beat quarterly expectations with $0.28 EPS (vs. $0.27) and revenue of $614.5M (vs. $591.7M), with revenue up 33.6% year-over-year, but the company remains unprofitable with a negative net margin and negative return on equity.
• Insiders have been net sellers (551,851 shares sold, ~$102.7M over three months, including CEO Matthew Prince), while analysts hold a consensus “Moderate Buy” rating and an average price target of $230.70 amid several recent target cuts.

Capital World Investors lessened its stake in shares of Cloudflare, Inc. (NYSE:NET - Free Report) by 0.7% during the 3rd quarter, according to its most recent 13F filing with the SEC. The firm owned 40,515,386 shares of the company's stock after selling 292,102 shares during the period. Cloudflare makes up approximately 1.2% of Capital World Investors' holdings, making the stock its 13th largest holding. Capital World Investors owned approximately 11.57% of Cloudflare worth $8,694,440,000 at the end of the most recent reporting period.

Several other large investors have also modified their holdings of NET. Physician Wealth Advisors Inc. increased its stake in Cloudflare by 693.3% in the 3rd quarter. Physician Wealth Advisors Inc. now owns 119 shares of the company's stock worth $26,000 after buying an additional 104 shares during the period. Westside Investment Management Inc. raised its position in shares of Cloudflare by 100.0% in the 3rd quarter. Westside Investment Management Inc. now owns 130 shares of the company's stock worth $28,000 after acquiring an additional 65 shares in the last quarter. Twin Peaks Wealth Advisors LLC purchased a new position in shares of Cloudflare in the 2nd quarter worth approximately $29,000. ORG Wealth Partners LLC increased its position 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 purchasing an additional 70 shares in the last quarter. Finally, Cloud Capital Management LLC purchased a new stake in Cloudflare in the third quarter valued at about $31,000. Hedge funds and other institutional investors own 82.68% of the company's stock.

Cloudflare Stock Up 3.3%

NYSE NET opened at $201.59 on Tuesday. The business's fifty day simple moving average is $184.32 and its 200-day simple moving average is $202.65. The company has a quick ratio of 1.98, a current ratio of 1.98 and a debt-to-equity ratio of 1.35. The firm has a market cap of $70.61 billion, a PE ratio of -695.11 and a beta of 1.98. Cloudflare, Inc. has a 52 week low of $89.42 and a 52 week high of $260.00.

Cloudflare (NYSE:NET - Get Free Report) last released its quarterly earnings data on Tuesday, February 10th. The company reported $0.28 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.27 by $0.01. The firm 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%. Cloudflare's revenue was up 33.6% compared to the same quarter last year. During the same period last year, the business earned $0.19 earnings per share. As a group, equities analysts anticipate that Cloudflare, Inc. will post -0.11 earnings per share for the current year.

Analysts Set New Price Targets

A number of brokerages have recently commented on NET. Needham & Company LLC lowered their target price on Cloudflare from $285.00 to $250.00 and set a "buy" rating on the stock in a research note on Wednesday, February 11th. UBS Group reissued a "neutral" rating and issued a $220.00 price target on shares of Cloudflare in a report on Wednesday, February 11th. Wolfe Research reaffirmed a "peer perform" rating on shares of Cloudflare in a research note on Monday, January 26th. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Cloudflare in a report on Wednesday, January 21st. Finally, Scotiabank decreased their target price on shares of Cloudflare from $255.00 to $225.00 and set a "sector perform" rating for the company in a research note on Wednesday, February 11th. One analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, seven have given a Hold rating and three have issued a Sell rating to the company. Based on data from MarketBeat, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $230.70.

Insider Buying and Selling at Cloudflare

In other news, CEO Matthew Prince sold 52,384 shares of the company's stock in a transaction on Thursday, February 26th. The stock was sold at an average price of $173.78, for a total value of $9,103,291.52. Following the transaction, the chief executive officer owned 22,911 shares of the company's stock, valued at $3,981,473.58. This represents a 69.57% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. Also, Director John Graham-Cumming sold 2,520 shares of the stock in a transaction on Monday, February 9th. The stock was sold at an average price of $173.35, for a total value of $436,842.00. Following the transaction, the director owned 495,191 shares of the company's stock, valued at approximately $85,841,359.85. This represents a 0.51% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last three months, insiders have sold 551,851 shares of company stock worth $102,673,182. Insiders own 10.89% 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.

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