Cloudflare, Inc. $NET Stock Sold by Sterling Capital Management LLC

Key Points

• Sterling Capital Management cut its Cloudflare stake by 38.4% in the third quarter, selling 4,921 shares and retaining 7,891 shares valued at approximately $2.74 million. Institutional investors and hedge funds still own 82.68% of the company.
• Cloudflare reported quarterly revenue of $696.1 million, up 35.9% year over year, and earnings of $0.29 per share, beating analyst estimates. Analysts maintain a “Moderate Buy” consensus with an average price target of $330.59.
• Valuation and insider selling remain risks: The stock trades at a very high earnings and sales premium, while insiders sold 476,339 shares worth about $143.4 million over the past 90 days, mostly through pre-arranged trading plans.

Sterling Capital Management LLC lessened its stake in Cloudflare, Inc. (NYSE:NET - Free Report) by 38.4% in the 3rd quarter, according to the company in its most recent Form 13F filing with the SEC. The fund owned 7,891 shares of the company's stock after selling 4,921 shares during the quarter. Sterling Capital Management LLC's holdings in Cloudflare were worth $2,740,000 at the end of the most recent reporting period.

A number of other institutional investors and hedge funds also recently added to or reduced their stakes in NET. Jennison Associates LLC increased its stake in shares of Cloudflare by 135.8% in the 1st quarter. Jennison Associates LLC now owns 4,394,484 shares of the company's stock worth $906,758,000 after acquiring an additional 2,530,872 shares during the last quarter. Swedbank AB boosted its position in shares of Cloudflare by 697.5% during the 1st quarter. Swedbank AB now owns 927,606 shares of the company's stock valued at $191,402,000 after acquiring an additional 811,297 shares during the last quarter. Alyeska Investment Group L.P. acquired a new position in shares of Cloudflare during the 2nd quarter valued at about $75,595,000. USS Investment Management Ltd grew its holdings in shares of Cloudflare by 452.3% in the first quarter. USS Investment Management Ltd now owns 296,322 shares of the company's stock valued at $61,156,000 after purchasing an additional 242,668 shares during the period. Finally, Pictet Asset Management Holding SA increased its position in Cloudflare by 17.6% during the first quarter. Pictet Asset Management Holding SA now owns 1,381,985 shares of the company's stock worth $284,900,000 after purchasing an additional 206,506 shares during the last quarter. Institutional investors and hedge funds own 82.68% of the company's stock.

Key Headlines Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Cloud stocks are rebounding: Cloudflare is benefiting from a broader recovery in cloud-software shares, with investors especially favoring companies that secure and keep applications running. Cloudflare Climbs as Cloud Stocks Rebound
• Positive Sentiment: PHP security crisis highlights demand for Cloudflare: The company reported millions of attempted exploits after critical PHP vulnerabilities were disclosed. The heightened threat environment reinforces the need for Cloudflare’s web-security and protective services and has helped lift cybersecurity stocks. Cloudflare sees millions of exploit attempts after PHP disclosure
• Positive Sentiment: Growth outlook remains attractive to some investors: Brown Advisory cited accelerating growth at Cloudflare, while a bullish analyst view argued that AI-driven traffic, bot verification, and enterprise adoption could provide substantial long-term expansion opportunities. Brown Advisory Sees Accelerating Growth at Cloudflare
• Neutral Sentiment: Valuation is a key risk: Cloudflare’s multiyear share-price gains have significantly outpaced its sales growth, leaving the stock valued at a rich sales premium. That can support momentum but makes the shares sensitive to any slowdown in growth or weaker guidance. Cloudflare Stock May Trade at a Rich Sales Premium
• Negative Sentiment: Execution concerns remain: Commentary has pointed to potentially misleading AI-agent enthusiasm, declining gross margins, and a reported workforce reduction, factors that could temper the bullish narrative if they pressure profitability or revenue quality. PHP Flaws Set Off Cyber Alarm

Insider Buying and Selling

In related news, insider Michelle Zatlyn sold 33,003 shares of the firm's stock in a transaction dated Wednesday, August 19th. The stock was sold at an average price of $294.63, for a total transaction of $9,723,673.89. Following the completion of the transaction, the insider directly owned 69,775 shares in the company, valued at $20,557,808.25. This trade represents a 32.11% decrease in their position. The sale was disclosed in a legal filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Thomas Seifert sold 55,000 shares of the stock in a transaction that occurred on Tuesday, August 4th. The stock was sold at an average price of $300.30, for a total transaction of $16,516,500.00. Following the sale, the chief financial officer owned 113,790 shares in the company, valued at approximately $34,171,137. This trade represents a 32.58% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 476,339 shares of company stock valued at $143,439,267. Corporate insiders own 10.66% of the company's stock.

Cloudflare Price Performance

Cloudflare stock opened at $325.68 on Monday. The company's 50 day simple moving average is $318.54 and its 200-day simple moving average is $267.87. The company has a market capitalization of $115.12 billion, a price-to-earnings ratio of -561.52, a price-to-earnings-growth ratio of 259.07 and a beta of 1.65. Cloudflare, Inc. has a 1 year low of $158.83 and a 1 year high of $370.35. The company has a debt-to-equity ratio of 1.22, a quick ratio of 1.82 and a current ratio of 1.82.

Cloudflare (NYSE:NET - Get Free Report) last posted its quarterly earnings data on Thursday, August 6th. The company reported $0.29 earnings per share for the quarter, topping analysts' consensus estimates of $0.27 by $0.02. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The firm had revenue of $696.06 million during the quarter, compared to analysts' expectations of $664.66 million. During the same quarter last year, the company posted $0.21 EPS. The firm's quarterly revenue was up 35.9% on a year-over-year basis. Cloudflare has set its Q3 2026 guidance at 0.340-0.340 EPS and its FY 2026 guidance at 1.250-1.260 EPS. As a group, equities research analysts expect that Cloudflare, Inc. will post 0.03 earnings per share for the current year.

Wall Street Analysts Forecast Growth

A number of brokerages have commented on NET. Sanford C. Bernstein lifted their target price on shares of Cloudflare from $164.00 to $181.00 and gave the stock a "market perform" rating in a research note on Thursday, September 17th. Morgan Stanley reissued an "overweight" rating and issued a $370.00 price target on shares of Cloudflare in a research note on Friday, August 7th. TD Cowen raised their price target on shares of Cloudflare from $355.00 to $375.00 and gave the stock a "buy" rating in a report on Tuesday, October 13th. Cantor Fitzgerald reaffirmed a "neutral" rating and set a $340.00 price target on shares of Cloudflare in a research report on Monday, October 5th. Finally, Wells Fargo & Company upped their price objective on Cloudflare from $300.00 to $380.00 and gave the company an "overweight" rating in a report on Friday, August 7th. One equities research analyst has rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating, six have given a Hold rating and five have given a Sell rating to the company. According to MarketBeat, Cloudflare presently has an average rating of "Moderate Buy" and an average price target of $330.59.

Cloudflare Company Profile

Cloudflare, Inc NYSE: NET provides cloud connectivity, security and performance services for websites, applications, corporate networks and other internet-connected resources. Its global network is designed to help organizations improve the reliability, speed and security of digital services while reducing the complexity of managing internet infrastructure.

The company's offerings include content delivery and authoritative domain name system services, distributed denial-of-service protection, web application and application programming interface security, bot management, and network security tools.

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