Cloudflare, Inc. $NET Shares Sold by Highland Capital Management LLC

Key Points

• Highland Capital Management cut its stake in Cloudflare by 64.1% in Q4, selling 10,278 shares and retaining 5,766 shares worth about $1.14 million per its SEC filing.
• Cloudflare reported a Q (Feb) beat with $0.28 EPS vs. $0.27 expected and revenue of $614.5M (up 33.6% YoY), but remains unprofitable with a negative net margin and negative ROE.
• Significant insider selling has occurred recently — including CEO Matthew Prince (52,384 shares) and others — with insiders offloading 638,766 shares (~$125.8M) in the past three months, even as analysts maintain a “Moderate Buy” consensus (avg. target ~$232.62).

Highland Capital Management LLC lessened its stake in Cloudflare, Inc. (NYSE:NET - Free Report) by 64.1% in the 4th quarter, according to the company in its most recent filing with the Securities & Exchange Commission. The firm owned 5,766 shares of the company's stock after selling 10,278 shares during the quarter. Highland Capital Management LLC's holdings in Cloudflare were worth $1,137,000 as of its most recent SEC filing.

Several other institutional investors and hedge funds have also modified their holdings of NET. Jennison Associates LLC grew its position in shares of Cloudflare by 802.6% during the 4th quarter. Jennison Associates LLC now owns 1,863,612 shares of the company's stock valued at $367,411,000 after acquiring an additional 1,657,144 shares during the period. Groupama Asset Managment grew its position in shares of Cloudflare by 82.6% during the 3rd quarter. Groupama Asset Managment now owns 2,100,000 shares of the company's stock valued at $450,639,000 after acquiring an additional 950,000 shares during the period. Vanguard Group Inc. grew its position in shares of Cloudflare by 2.6% during the 3rd quarter. Vanguard Group Inc. now owns 32,317,249 shares of the company's stock valued at $6,934,958,000 after acquiring an additional 821,684 shares during the period. Rakuten Investment Management Inc. acquired a new stake in shares of Cloudflare during the 3rd quarter valued at about $138,660,000. Finally, Massachusetts Financial Services Co. MA grew its position in shares of Cloudflare by 96.3% during the 3rd quarter. Massachusetts Financial Services Co. MA now owns 1,302,893 shares of the company's stock valued at $279,588,000 after acquiring an additional 639,245 shares during the period. Institutional investors and hedge funds own 82.68% of the company's stock.

Cloudflare Trading Up 9.0%

Shares of Cloudflare stock opened at $244.46 on Wednesday. The firm has a market capitalization of $86.04 billion, a PE ratio of -842.92 and a beta of 1.67. Cloudflare, Inc. has a twelve month low of $120.46 and a twelve month high of $260.00. The firm's 50-day moving average price is $201.24 and its 200 day moving average price is $200.23. 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 results on Tuesday, February 10th. The company reported $0.28 earnings per share for the quarter, beating analysts' consensus estimates of $0.27 by $0.01. The firm had revenue of $614.51 million for the quarter, compared to analyst estimates of $591.67 million. Cloudflare had a negative net margin of 4.72% and a negative return on equity of 7.24%. Cloudflare's quarterly revenue was up 33.6% compared to the same quarter last year. During the same period last year, the company posted $0.19 EPS. On average, sell-side analysts predict that Cloudflare, Inc. will post -0.11 EPS for the current fiscal year.

Key Headlines Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Forrester named Cloudflare a Leader in its Edge Development Platforms report — this third‑party recognition supports Cloudflare’s positioning in edge and developer tooling, helping justify growth/market‑share expectations. Read More.
• Positive Sentiment: Cloudflare is pushing AI adoption — announcing automated onboarding for AI agents and startup credits (up to $100k) to capture AI‑native apps and developer adoption, which could boost new customer acquisition and revenue over time. Read More.
• Positive Sentiment: High‑profile media endorsement: Jim Cramer called Cloudflare a “terrific cyber defender” on Mad Money ahead of earnings, likely drawing retail interest and short‑term buying momentum. Read More.
• Neutral Sentiment: Analyst coverage remains constructive overall (consensus/average target ≈ $231–$232), but views are mixed — some trims and some upgrades leave upside modest vs. current levels. That keeps buy‑side interest but limits conviction for large fresh upgrades. Read More.
• Neutral Sentiment: Q1 earnings previews flag strong AI and enterprise demand tailwinds but warn macro pressures and potential deal delays — creating a binary earnings reaction: good execution likely extends the rally, while any softness could prompt profit‑taking. Read More.
• Negative Sentiment: Valuation concerns and downgrades: Seeking Alpha downgraded NET to Hold, arguing much of the growth is priced in — that narrative can weigh on value‑oriented funds and temper the rally. Read More.
• Negative Sentiment: Insider selling: Directors Carl Ledbetter (15,000 shares at ~$238 on May 5, via a 10b5‑1 plan), John Graham‑Cumming (2,520 shares at ~$221.58 on May 4, 10b5‑1), and smaller sales from Mark Hawkins were reported — these are largely pre‑arranged and common at the current multiple, but some traders interpret them as modest caution. Read More. Read More. Read More.

Insider Activity at Cloudflare

In related news, CEO Matthew Prince sold 52,384 shares of the firm's stock in a transaction dated Thursday, February 26th. The shares were sold at an average price of $173.78, for a total value of $9,103,291.52. Following the transaction, the chief executive officer directly owned 22,911 shares of the company's stock, valued at approximately $3,981,473.58. This trade represents a 69.57% decrease in their position. The sale was disclosed in a filing with the SEC, which can be accessed through the SEC website. Also, insider Michelle Zatlyn sold 35,080 shares of the firm's stock in a transaction dated Thursday, February 19th. The shares were sold at an average price of $187.39, for a total transaction of $6,573,641.20. Following the completion of the transaction, the insider directly owned 34,514 shares in the company, valued at $6,467,578.46. This represents a 50.41% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. In the last three months, insiders have sold 638,766 shares of company stock valued at $125,757,221. 10.89% of the stock is owned by corporate insiders.

Analyst Ratings Changes

A number of equities research analysts have recently commented on the company. DZ Bank upgraded Cloudflare from a "hold" rating to a "buy" rating and set a $215.00 target price on the stock in a research report on Friday, February 13th. Guggenheim raised their target price on Cloudflare from $117.00 to $140.00 and gave the company a "sell" rating in a research report on Wednesday, February 11th. Jefferies Financial Group assumed coverage on Cloudflare in a research report on Wednesday, April 15th. They set a "buy" rating on the stock. Morgan Stanley set a $245.00 target price on Cloudflare in a research report on Wednesday, February 11th. Finally, Cantor Fitzgerald restated a "neutral" rating and set a $224.00 target price on shares of Cloudflare in a research report on Wednesday, February 11th. One investment analyst has rated the stock with a Strong Buy rating, nineteen have given a Buy rating, seven have assigned a Hold rating and three have issued a Sell rating to the company's stock. Based on data from MarketBeat, the stock has a consensus rating of "Moderate Buy" and an average price target of $232.62.

Cloudflare 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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