WD Rutherford LLC Boosts Stake in Cloudflare, Inc. $NET

Key Points

• WD Rutherford LLC increased its Cloudflare stake by 50% in the second quarter, adding 4,719 shares to reach 14,153 shares valued at approximately $3.47 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 non-GAAP EPS of $0.29, exceeding analyst expectations. AI security, enterprise demand, and new government certifications are supporting the company’s growth outlook.
• Analyst sentiment remains positive, with a consensus “Moderate Buy” rating and an average price target of $320.19, though Cloudflare faces risks from its premium valuation, ongoing GAAP losses, and potential shareholder dilution from its $2.175 billion convertible-note offering.

WD Rutherford LLC increased its holdings in shares of Cloudflare, Inc. (NYSE:NET - Free Report) by 50.0% during the second quarter, according to its most recent disclosure with the Securities and Exchange Commission (SEC). The firm owned 14,153 shares of the company's stock after acquiring an additional 4,719 shares during the period. WD Rutherford LLC's holdings in Cloudflare were worth $3,471,000 as of its most recent SEC filing.

Other large investors have also recently bought and sold shares of the company. Norges Bank purchased a new stake in shares of Cloudflare during the 4th quarter worth $718,316,000. Jennison Associates LLC increased its holdings 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 valued at $906,758,000 after purchasing an additional 2,530,872 shares in the last quarter. Corient Private Wealth LLC increased its holdings in shares of Cloudflare by 4,042.6% in the 4th quarter. Corient Private Wealth LLC now owns 1,399,378 shares of the company's stock valued at $275,887,000 after purchasing an additional 1,365,598 shares in the last quarter. Swedbank AB lifted its stake in shares of Cloudflare by 697.5% in the first quarter. Swedbank AB now owns 927,606 shares of the company's stock valued at $191,402,000 after purchasing an additional 811,297 shares during the period. Finally, National Pension Service boosted its holdings in Cloudflare by 53.2% during the fourth quarter. National Pension Service now owns 948,003 shares of the company's stock worth $186,899,000 after buying an additional 329,341 shares in the last quarter. Hedge funds and other institutional investors own 82.68% of the company's stock.

Key Stories Impacting 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

Insider Transactions at Cloudflare

In other Cloudflare news, Director John Graham-Cumming sold 2,520 shares of the stock in a transaction on Monday, August 10th. The stock was sold at an average price of $303.97, for a total transaction of $766,004.40. Following the sale, the director owned 494,909 shares in the company, valued at approximately $150,437,488.73. This represents a 0.51% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Carl Ledbetter sold 5,000 shares of the firm's stock in a transaction on Thursday, August 6th. The stock was sold at an average price of $281.98, for a total value of $1,409,900.00. Following the transaction, the director directly owned 883,073 shares of the company's stock, valued at $249,008,924.54. The trade was a 0.56% decrease in their position. 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 quarter. Insiders own 10.66% of the company's stock.

Analyst Ratings Changes

NET has been the topic of several recent analyst reports. Needham & Company LLC upped their target price on shares of Cloudflare from $280.00 to $380.00 and gave the stock a "buy" rating in a research report on Friday, August 7th. Morgan Stanley reissued an "overweight" rating and set a $370.00 price target on shares of Cloudflare in a research note on Friday, August 7th. Wells Fargo & Company upped their price target on Cloudflare from $300.00 to $380.00 and gave the stock an "overweight" rating in a report on Friday, August 7th. Guggenheim raised their price objective on Cloudflare from $140.00 to $160.00 and gave the company a "sell" rating in a research note on Friday, August 7th. Finally, Mizuho lifted their price objective on Cloudflare from $260.00 to $310.00 and gave the stock an "outperform" rating in a report on Wednesday, July 15th. Two research analysts have rated the stock with a Strong Buy rating, twenty-one have given a Buy rating, six have given a Hold rating and four have issued a Sell rating to the stock. According to MarketBeat.com, Cloudflare currently has an average rating of "Moderate Buy" and an average price target of $320.19.

Cloudflare Stock Performance

Shares of NET opened at $311.48 on Thursday. Cloudflare, Inc. has a 12-month low of $158.83 and a 12-month high of $324.73. The stock has a market cap of $110.10 billion, a P/E ratio of -537.03, a PEG ratio of 189.82 and a beta of 1.65. The company has a current ratio of 1.82, a quick ratio of 1.82 and a debt-to-equity ratio of 1.22. The company has a 50-day moving average of $259.43 and a two-hundred day moving average of $221.96.

Cloudflare (NYSE:NET - Get Free Report) last released its quarterly earnings results on Wednesday, August 5th. The company reported $0.29 EPS for the quarter, beating the consensus estimate 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 business had revenue of $696.06 million for the quarter, compared to analyst estimates of $664.66 million. During the same period in the prior year, the business earned $0.21 earnings per share. The company's quarterly revenue was up 35.9% on a year-over-year basis. As a group, research analysts predict that Cloudflare, Inc. will post 0.03 EPS for the current fiscal year.

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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