Cloudflare (NYSE:NET) Shares Climb 4.2% After Analyst Upgrade

Key Points

• Cloudflare shares rose 4.2% to about $306 after DZ Bank upgraded the stock from sell to buy, setting a $300 price target—below the share price reported.
• Q3 revenue increased 39.2% year over year to $782.5 million, while adjusted EPS of $0.38 beat estimates; the company also raised its full-year outlook and issued stronger-than-expected next-quarter revenue guidance.
• Analyst views remain broadly positive but mixed: MarketBeat reported a “Moderate Buy” consensus and a $338.48 average target, while coverage also flags valuation and profitability risks.

Cloudflare, Inc. (NYSE:NET - Get Free Report)'s stock price rose 4.2% during mid-day trading on Tuesday after DZ Bank upgraded the stock from a sell rating to a buy rating. DZ Bank now has a $300.00 price target on the stock. Cloudflare traded as high as $306.95 and last traded at $306.0670. 4,630,577 shares traded hands during mid-day trading, an increase of 13% from the average daily volume of 4,083,855 shares. The stock had previously closed at $293.75.

Other equities research analysts also recently issued research reports about the company. Piper Sandler restated an "overweight" rating and set a $337.00 price target (up from $333.00) on shares of Cloudflare in a report on Friday. Weiss Ratings reaffirmed a "sell (d-)" rating on shares of Cloudflare in a research report on Thursday, October 15th. Jefferies Financial Group decreased their price objective on Cloudflare from $320.00 to $315.00 and set a "hold" rating for the company in a research note on Friday. Needham & Company LLC lowered their price objective on Cloudflare from $380.00 to $365.00 and set a "buy" rating for the company in a research report on Friday. Finally, Mizuho upped their target price on shares of Cloudflare from $260.00 to $310.00 and gave the stock an "outperform" rating in a research note on Wednesday, July 15th. Twenty-six investment analysts have rated the stock with a Buy rating, seven have given a Hold rating and three have assigned a Sell rating to the company's stock. According to MarketBeat, Cloudflare has an average rating of "Moderate Buy" and a consensus target price of $338.48.

Insiders Place Their Bets

In other news, CFO Thomas Seifert sold 12,500 shares of the company's stock in a transaction dated Monday, October 19th. The stock was sold at an average price of $299.59, for a total transaction of $3,744,875.00. Following the completion of the transaction, the chief financial officer directly owned 104,958 shares of the company's stock, valued at approximately $31,444,367.22. This represents a 10.64% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Michelle Zatlyn sold 33,003 shares of the company's stock in a transaction dated Wednesday, October 7th. The stock was sold at an average price of $348.29, for a total value of $11,494,614.87. Following the transaction, the insider directly owned 69,775 shares of the company's stock, valued at approximately $24,301,934.75. This represents a 32.11% 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. Insiders sold 256,537 shares of company stock valued at $78,750,901 in the last ninety days. Insiders own 10.66% of the company's stock.

Key Headlines Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Cloudflare reported Q3 revenue of $782.5 million, up 39.2% year over year, and adjusted earnings of $0.38 per share; both exceeded analyst expectations. The company also raised its full-year outlook. Why is Cloudflare stock rocketing higher today
• Positive Sentiment: Next-quarter revenue guidance came in well above estimates, and management cited demand for AI-related security and developer services. Cloudflare also moved its target for GAAP profitability forward to Q4 2026. Cloudflare Q3 earnings call puts AI demand and margins in focus
• Positive Sentiment: DZ Bank upgraded NET from “sell” to “buy,” signaling improved analyst sentiment. Its $300 price target, however, is slightly below the share price cited in the report. DZ Bank stock recommendations
• Neutral Sentiment: Recent coverage describes Cloudflare’s quarter as a record, but notes a margin trade-off. Investors will watch whether spending and growth investments weigh on profitability as sales expand. Cloudflare’s best quarter ever comes with margin trade-off
• Negative Sentiment: Valuation remains a risk after the recent rally: commentary highlights that the stock is expensive, leaving it vulnerable if growth or outlook disappoints. Cloudflare is up 11% in a week. Is its “even higher gear” really that good?

Institutional Trading of Cloudflare

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Rothschild Investment LLC grew its holdings in Cloudflare by 38.3% in the 3rd quarter. Rothschild Investment LLC now owns 7,526 shares of the company's stock worth $2,614,000 after buying an additional 2,084 shares in the last quarter. Cibc World Market Inc. increased its position in Cloudflare by 0.4% in the 3rd quarter. Cibc World Market Inc. now owns 15,486 shares of the company's stock valued at $5,378,000 after acquiring an additional 61 shares during the period. HighTower Advisors LLC raised its stake in Cloudflare by 0.9% during the 3rd quarter. HighTower Advisors LLC now owns 127,729 shares of the company's stock valued at $44,358,000 after acquiring an additional 1,150 shares in the last quarter. Western Wealth Management LLC raised its stake in Cloudflare by 14.6% during the 3rd quarter. Western Wealth Management LLC now owns 2,314 shares of the company's stock valued at $804,000 after acquiring an additional 295 shares in the last quarter. Finally, Intech Investment Management LLC raised its stake in Cloudflare by 21.3% during the 3rd quarter. Intech Investment Management LLC now owns 12,689 shares of the company's stock valued at $4,407,000 after acquiring an additional 2,225 shares in the last quarter. Institutional investors and hedge funds own 82.68% of the company's stock.

Cloudflare Stock Up 4.2%

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 stock has a 50-day simple moving average of $318.15 and a 200-day simple moving average of $250.39. The company has a market cap of $108.19 billion, a price-to-earnings ratio of -450.10, a price-to-earnings-growth ratio of 206.44 and a beta of 1.37.

Cloudflare (NYSE:NET - Get Free Report) last posted its quarterly earnings data on Thursday, November 5th. The company reported $0.38 earnings per share for the quarter, topping the consensus estimate of $0.34 by $0.04. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The business had revenue of $782.51 million during the quarter, compared to the consensus estimate of $737.16 million. During the same quarter in the prior year, the company posted $0.27 earnings per share. The company's quarterly revenue was up 39.2% compared to the same quarter last year. As a group, analysts predict that Cloudflare, Inc. will post 0.03 EPS for the current year.

About Cloudflare

Cloudflare, Inc. provides cloud-based services that help businesses and other organizations protect, connect and improve the performance of websites, applications and networks. Its global network delivers services including content delivery, domain name system management, and protection against distributed denial-of-service attacks and other cyber threats. The company also offers web application security, bot management and Zero Trust services for securing access to applications and internal networks.

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