Nicholas Investment Partners LP Sells 4,225,000 Shares of Cloudflare, Inc. $NET

Key Points

• Nicholas Investment Partners LP sharply cut its Cloudflare stake by 99.5% in the fourth quarter, selling 4.225 million shares and leaving it with just 20,472 shares worth about $4.0 million.
• Cloudflare reported better-than-expected quarterly results, with EPS of $0.25 versus $0.23 expected and revenue of $639.8 million versus $620.8 million estimated, while revenue grew 33.5% year over year.
• Despite some insider selling and mixed signals, Wall Street sentiment remains broadly constructive: several analysts raised price targets or reiterated buy ratings, and MarketBeat shows an average rating of Moderate Buy with a $241.35 target.

Nicholas Investment Partners LP decreased its holdings in shares of Cloudflare, Inc. (NYSE:NET - Free Report) by 99.5% during the 4th quarter, according to the company in its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor owned 20,472 shares of the company's stock after selling 4,225,000 shares during the period. Nicholas Investment Partners LP's holdings in Cloudflare were worth $4,036,000 at the end of the most recent reporting period.

Other institutional investors and hedge funds also recently made changes to their positions in the company. Fifth Lane Capital LP bought a new stake in Cloudflare during the 4th quarter worth approximately $375,000. LRT Capital Management LLC lifted its holdings in shares of Cloudflare by 19.0% in the fourth quarter. LRT Capital Management LLC now owns 3,703 shares of the company's stock valued at $730,000 after purchasing an additional 591 shares in the last quarter. Clear Street Group Inc. bought a new position in shares of Cloudflare in the fourth quarter valued at approximately $628,000. Entropy Technologies LP bought a new position in shares of Cloudflare in the fourth quarter valued at approximately $3,152,000. Finally, Brown Advisory Inc. lifted its holdings in shares of Cloudflare by 21.4% in the fourth quarter. Brown Advisory Inc. now owns 30,263 shares of the company's stock valued at $5,966,000 after purchasing an additional 5,336 shares in the last quarter. Institutional investors own 82.68% of the company's stock.

Cloudflare Stock Performance

Shares of NET opened at $227.91 on Friday. The company has a current ratio of 1.96, a quick ratio of 1.96 and a debt-to-equity ratio of 1.29. The company has a market capitalization of $80.56 billion, a price-to-earnings ratio of -911.62, a PEG ratio of 774.17 and a beta of 1.70. The stock has a 50 day moving average of $216.10 and a 200 day moving average of $201.68. Cloudflare, Inc. has a 12 month low of $158.83 and a 12 month high of $276.82.

Cloudflare (NYSE:NET - Get Free Report) last issued its quarterly earnings results on Thursday, May 7th. The company reported $0.25 EPS for the quarter, beating analysts' consensus estimates of $0.23 by $0.02. The company had revenue of $639.76 million during the quarter, compared to the consensus estimate of $620.83 million. Cloudflare had a negative return on equity of 5.65% and a negative net margin of 3.72%.Cloudflare's revenue was up 33.5% on a year-over-year basis. During the same period last year, the business posted $0.16 earnings per share. Cloudflare has set its FY 2026 guidance at 1.190-1.200 EPS and its Q2 2026 guidance at 0.270-0.270 EPS. As a group, sell-side analysts forecast that Cloudflare, Inc. will post 0.01 earnings per share for the current year.

Trending Headlines about Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Truist Financial raised its price target on Cloudflare to $250 from $225 and reiterated a buy rating, implying further upside from current levels. Truist raises Cloudflare price target
• Positive Sentiment: Morgan Stanley also sharply increased its Cloudflare price target, adding to the bullish analyst backdrop and reinforcing the view that expectations for the company are improving. Morgan Stanley raises Cloudflare price target
• Positive Sentiment: Barclays kept a buy rating on Cloudflare, while other reports noted Wall Street’s overall average recommendation remains equivalent to a Buy, supporting investor confidence in the stock. Barclays keeps buy rating on Cloudflare
• Positive Sentiment: Zacks said Cloudflare may be well poised for a surge because of solid earnings estimate revisions, which often signals improving fundamentals and stronger near-term sentiment. Zacks says Cloudflare may surge
• Neutral Sentiment: Jim Cramer commented that Cloudflare’s long-term direction looks “pretty fabulous,” but also noted the stock has been volatile, making the takeaway more of a commentary on long-term prospects than a direct catalyst. Jim Cramer comments on Cloudflare
• Negative Sentiment: One report flagged a new sell recommendation for Cloudflare, suggesting some analysts remain cautious despite the broader bullish tone. Cloudflare new sell recommendation

Insiders Place Their Bets

In other Cloudflare news, insider Michelle Zatlyn sold 25,641 shares of the firm's stock in a transaction on Tuesday, May 26th. The stock was sold at an average price of $211.83, for a total value of $5,431,533.03. Following the completion of the sale, the insider directly owned 47,425 shares of the company's stock, valued at $10,046,037.75. This trade represents a 35.09% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Alissa Michelle Starzak sold 16,243 shares of the firm's stock in a transaction on Thursday, May 28th. The stock was sold at an average price of $216.15, for a total value of $3,510,924.45. Following the completion of the sale, the insider directly owned 118,395 shares of the company's stock, valued at $25,591,079.25. This represents a 12.06% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last ninety days, insiders sold 527,784 shares of company stock valued at $111,803,817. Company insiders own 10.89% of the company's stock.

Wall Street Analyst Weigh In

A number of research analysts have recently weighed in on NET shares. Weiss Ratings restated a "sell (d-)" rating on shares of Cloudflare in a report on Monday, April 20th. Zacks Research raised Cloudflare from a "strong sell" rating to a "hold" rating in a research report on Friday, March 13th. KeyCorp reaffirmed an "overweight" rating on shares of Cloudflare in a research report on Wednesday. Royal Bank Of Canada increased their price target on Cloudflare from $240.00 to $260.00 and gave the company an "outperform" rating in a research report on Wednesday. Finally, TD Cowen reaffirmed a "buy" rating on shares of Cloudflare in a research report on Wednesday. Twenty research analysts have rated the stock with a Buy rating, seven have issued a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat, the company presently has an average rating of "Moderate Buy" and an average price target of $241.35.

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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