Royal Fund Management LLC Trims Holdings in Cloudflare, Inc. $NET

Key Points

• Royal Fund Management cut its Cloudflare stake by 72.1% in the second quarter, selling 10,600 shares and retaining 4,100 shares valued at approximately $1.006 million.
• Other institutional investors generally increased exposure to Cloudflare, including Jupiter Asset Management and Pictet Asset Management; hedge funds and institutions collectively own 82.68% of the stock.
• Cloudflare’s latest quarter beat expectations, with revenue rising 35.9% year over year to $696.06 million and EPS of $0.29 versus $0.27 expected. Analysts maintain a “Moderate Buy” consensus with a $320.19 average price target, although insider selling and the company’s high valuation remain risks.

Royal Fund Management LLC lowered its stake in shares of Cloudflare, Inc. (NYSE:NET - Free Report) by 72.1% during the second quarter, according to its most recent Form 13F filing with the SEC. The fund owned 4,100 shares of the company's stock after selling 10,600 shares during the period. Royal Fund Management LLC's holdings in Cloudflare were worth $1,006,000 at the end of the most recent quarter.

Several other large investors also recently added to or reduced their stakes in NET. Lingotto Investment Management LLP acquired a new stake in shares of Cloudflare in the 4th quarter valued at approximately $34,626,000. Jupiter Asset Management Ltd. increased its holdings in Cloudflare by 1,984.7% during the fourth 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 during the last quarter. Trek Financial LLC bought a new stake in Cloudflare during the fourth quarter worth $1,793,000. Pictet Asset Management Holding SA lifted its stake in Cloudflare by 17.6% in the first quarter. Pictet Asset Management Holding SA now owns 1,381,985 shares of the company's stock valued at $284,900,000 after acquiring an additional 206,506 shares during the last quarter. Finally, Thrivent Financial for Lutherans bought a new position in shares of Cloudflare in the 4th quarter valued at about $5,543,000. 82.68% of the stock is currently owned by hedge funds and other institutional investors.

Wall Street Analyst Weigh In

Several research analysts have recently weighed in on NET shares. BTIG Research boosted their price objective on shares of Cloudflare from $314.00 to $382.00 and gave the stock a "buy" rating in a research note on Friday, August 7th. Stifel Nicolaus set a $260.00 price target on Cloudflare in a report on Friday, May 8th. Weiss Ratings reissued a "sell (d-)" rating on shares of Cloudflare in a research report on Friday, July 17th. Wells Fargo & Company upped their price objective on Cloudflare from $300.00 to $380.00 and gave the company an "overweight" rating in a research note on Friday, August 7th. Finally, DZ Bank downgraded Cloudflare from a "strong-buy" rating to a "strong sell" rating in a research note on Friday, August 7th. Two equities research analysts have rated the stock with a Strong Buy rating, twenty-one have issued a Buy rating, six have given a Hold rating and four have assigned a Sell rating to the company. According to MarketBeat, the stock has an average rating of "Moderate Buy" and a consensus price target of $320.19.

Insiders Place Their Bets

In related news, insider Michelle Zatlyn sold 35,080 shares of the firm's stock in a transaction dated Friday, May 22nd. The shares were sold at an average price of $213.98, for a total transaction of $7,506,418.40. Following the transaction, the insider directly owned 47,425 shares of the company's stock, valued at approximately $10,148,001.50. This trade represents a 42.52% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CEO Matthew Prince sold 52,422 shares of the business's stock in a transaction dated Wednesday, July 1st. The shares were sold at an average price of $249.09, for a total transaction of $13,057,795.98. 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. Insiders have sold 752,052 shares of company stock worth $184,648,633 in the last 90 days. Company insiders own 10.66% of the company's stock.

Cloudflare Stock Up 1.5%

Cloudflare stock opened at $311.48 on Thursday. The company's 50-day moving average price is $259.43 and its two-hundred day moving average price is $221.96. The company has a quick ratio of 1.82, a current ratio of 1.82 and a debt-to-equity ratio of 1.22. The stock has a market cap of $110.10 billion, a P/E ratio of -537.03, a P/E/G ratio of 189.82 and a beta of 1.65. Cloudflare, Inc. has a twelve month low of $158.83 and a twelve month high of $324.73.

Cloudflare (NYSE:NET - Get Free Report) last issued its quarterly earnings data on Wednesday, August 5th. The company reported $0.29 earnings per share (EPS) for the quarter, topping analysts' consensus estimates 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 during the quarter, compared to analysts' expectations of $664.66 million. During the same quarter in the previous year, the company posted $0.21 earnings per share. The business's revenue was up 35.9% on a year-over-year basis. As a group, analysts expect that Cloudflare, Inc. will post 0.03 EPS for the current year.

More Cloudflare News

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

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.

Want to see what other hedge funds are holding NET? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Cloudflare, Inc. (NYSE:NET - Free Report).

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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