Merit Financial Group LLC Has $2.44 Million Stock Holdings in Cloudflare, Inc. $NET

Key Points

• Merit Financial Group increased its Cloudflare stake by 61.2% in the second quarter, holding 9,961 shares valued at approximately $2.44 million. Institutional investors collectively own 82.68% of Cloudflare.
• Cloudflare reported strong second-quarter results, with revenue rising 35.9% year over year to $696.1 million and adjusted EPS of $0.29, both exceeding estimates. Analysts maintain a “Moderate Buy” consensus rating with an average price target of $320.19.
• Growth prospects are balanced by valuation and dilution risks: AI-security demand, new partnerships and government certifications support expansion, while GAAP losses, a premium valuation, a $2.175 billion convertible-note offering and substantial insider selling remain concerns.

Merit Financial Group LLC raised its position in shares of Cloudflare, Inc. (NYSE:NET - Free Report) by 61.2% in the second quarter, according to its most recent filing with the SEC. The firm owned 9,961 shares of the company's stock after purchasing an additional 3,780 shares during the quarter. Merit Financial Group LLC's holdings in Cloudflare were worth $2,443,000 at the end of the most recent quarter.

A number of other hedge funds and other institutional investors have also recently modified their holdings of the company. Lingotto Investment Management LLP bought a new position in Cloudflare in the 4th quarter valued at about $34,626,000. Jupiter Asset Management Ltd. raised its position in shares of Cloudflare by 1,984.7% during the 4th quarter. Jupiter Asset Management Ltd. now owns 197,710 shares of the company's stock worth $38,979,000 after buying an additional 188,226 shares in the last quarter. Trek Financial LLC acquired a new stake in shares of Cloudflare in the 4th quarter worth approximately $1,793,000. Pictet Asset Management Holding SA lifted its stake in shares of Cloudflare by 17.6% in the 1st quarter. Pictet Asset Management Holding SA now owns 1,381,985 shares of the company's stock worth $284,900,000 after acquiring an additional 206,506 shares during the period. Finally, Thrivent Financial for Lutherans bought a new position in shares of Cloudflare in the fourth quarter valued at approximately $5,543,000. Institutional investors and hedge funds own 82.68% of the company's stock.

Trending Headlines about Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Strong second-quarter results support the rally. Cloudflare reported revenue of approximately $696.1 million, up 35.9% year over year and above expectations, while non-GAAP EPS of $0.29 exceeded consensus. Next-quarter revenue guidance of $736.5 million also topped analyst estimates, reinforcing confidence in continued growth. Cloudflare Q2 Deep Dive
• Positive Sentiment: AI security and enterprise demand are strengthening the growth story. Cloudflare’s AI-security strategy is supporting demand for SASE and Zero Trust products, while its agentic-AI and developer-platform offerings could help it win larger enterprise contracts and compete more directly with Palo Alto Networks and Zscaler. Cloudflare AI Security Strategy
• Positive Sentiment: New partnerships and government certifications expand Cloudflare’s addressable market. Signal selected Cloudflare as an independent Key Transparency auditor, adding credibility to Cloudflare’s privacy and security platform. Separately, FedRAMP High and GovRAMP Moderate authorizations position Cloudflare to pursue more government and regulated-industry contracts. Signal Partnership
• Neutral Sentiment: Analyst sentiment remains favorable but expectations are high. Cloudflare has a consensus “Moderate Buy” rating and an average target near $320, with several firms setting targets above that level. However, some target increases still imply limited upside after the stock’s substantial recent advance. Cloudflare Moderate Buy Rating
• Negative Sentiment: The $2.175 billion zero-coupon convertible-note offering creates a potential dilution overhang. The financing provides capital without cash interest payments, but conversions could dilute existing shareholders and increase future obligations. Cloudflare Convertible Notes Deal
• Negative Sentiment: Valuation and profitability remain risks. Cloudflare continues to post GAAP losses, and its premium valuation leaves the stock vulnerable if growth or margins disappoint. A director’s sale of 2,520 shares was conducted under a pre-arranged Rule 10b5-1 plan and is a relatively minor overhang. SEC Insider Transaction Filing

Wall Street Analysts Forecast Growth

Several equities research analysts recently commented on the company. Mizuho boosted their target price on Cloudflare from $260.00 to $310.00 and gave the stock an "outperform" rating in a report on Wednesday, July 15th. Barclays increased their price target on Cloudflare from $300.00 to $355.00 and gave the company an "overweight" rating in a research note on Friday, August 7th. Zacks Research upgraded Cloudflare from a "hold" rating to a "strong-buy" rating in a research report on Monday, July 20th. Deutsche Bank Aktiengesellschaft raised Cloudflare to a "buy" rating in a research note on Tuesday, July 7th. Finally, Benchmark lowered Cloudflare to an "underperform" rating in a report on Tuesday, July 7th. Two research analysts have rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating, six have assigned a Hold rating and four have given a Sell rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of "Moderate Buy" and an average target price of $320.19.

Cloudflare Trading Up 1.5%

Shares of NYSE:NET opened at $311.48 on Thursday. The stock has a market capitalization of $110.10 billion, a price-to-earnings ratio of -537.03, a PEG ratio of 189.82 and a beta of 1.65. Cloudflare, Inc. has a 1-year low of $158.83 and a 1-year high of $324.73. The company has a debt-to-equity ratio of 1.22, a quick ratio of 1.82 and a current ratio of 1.82. The company has a 50 day moving average price of $259.43 and a 200 day moving average price of $221.96.

Cloudflare (NYSE:NET - Get Free Report) last posted its quarterly earnings results on Wednesday, August 5th. The company reported $0.29 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.27 by $0.02. Cloudflare had a negative return on equity of 3.88% and a negative net margin of 8.21%.The company had revenue of $696.06 million for the quarter, compared to analysts' expectations of $664.66 million. During the same quarter in the prior year, the company earned $0.21 earnings per share. The firm's revenue was up 35.9% on a year-over-year basis. On average, research analysts anticipate that Cloudflare, Inc. will post 0.03 EPS for the current fiscal year.

Insider Buying and Selling

In other news, CEO Matthew Prince sold 52,422 shares of the business's stock in a transaction on Wednesday, July 1st. The stock was sold at an average price of $249.09, for a total transaction of $13,057,795.98. The sale was disclosed in a document filed with the SEC, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Michelle Zatlyn sold 35,080 shares of the company's stock in a transaction on Friday, May 22nd. The shares were sold at an average price of $213.98, for a total value of $7,506,418.40. Following the sale, the insider directly owned 47,425 shares of the company's stock, valued at approximately $10,148,001.50. This represents a 42.52% 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. Insiders have sold 752,052 shares of company stock worth $184,648,633 in the last three months. 10.66% of the stock is currently owned by insiders.

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.

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