Cloudflare (NYSE:NET) Shares Down 6.4% - Time to Sell?

Key Points

• Cloudflare shares fell 6.4% to about $285.62, despite trading above both its 50-day and 200-day moving averages. The stock carries a high valuation, including a negative P/E ratio of -494 and a P/E/G ratio of 184.12.
• Analysts remain broadly positive, with a “Moderate Buy” consensus and an average price target of $320.19; recent targets range from $250 to $380.
• Cloudflare exceeded quarterly expectations, reporting $0.29 in EPS versus $0.27 expected and $696.06 million in revenue, up 35.9% year over year. However, the company remains unprofitable, while insiders sold 640,531 shares worth approximately $168.5 million over the past three months.

Cloudflare, Inc. (NYSE:NET - Get Free Report) shares dropped 6.4% on Tuesday . The stock traded as low as $287.14 and last traded at $285.6150. Approximately 963,459 shares changed hands during trading, a decline of 77% from the average session volume of 4,250,159 shares. The stock had previously closed at $305.11.

Wall Street Analyst Weigh In

A number of equities research analysts recently weighed in on NET shares. New Street Research reaffirmed a "market outperform" rating on shares of Cloudflare in a research report on Monday, June 15th. Piper Sandler lifted their price target on Cloudflare from $250.00 to $333.00 and gave the company an "overweight" rating in a research note on Friday, August 7th. Cantor Fitzgerald reissued a "neutral" rating and set a $250.00 price objective on shares of Cloudflare in a report on Monday, August 3rd. Morgan Stanley reissued an "overweight" rating and issued a $370.00 price objective on shares of Cloudflare in a research note on Friday, August 7th. Finally, Wells Fargo & Company raised their target price on Cloudflare from $300.00 to $380.00 and gave the company an "overweight" rating in a report on Friday, August 7th. One investment analyst has rated the stock with a Strong Buy rating, twenty-one have given a Buy rating, seven have issued a Hold rating and four have given a Sell rating to the company. According to MarketBeat.com, Cloudflare has an average rating of "Moderate Buy" and an average target price of $320.19.

Cloudflare Trading Down 6.1%

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 firm has a 50 day moving average of $276.18 and a 200 day moving average of $232.91. The firm has a market cap of $101.28 billion, a PE ratio of -494.00, a P/E/G ratio of 184.12 and a beta of 1.65.

Cloudflare (NYSE:NET - Get Free Report) last issued its earnings results on Thursday, August 6th. The company reported $0.29 earnings per share for the quarter, topping analysts' consensus estimates of $0.27 by $0.02. The firm had revenue of $696.06 million during the quarter, compared to analyst estimates of $664.66 million. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The company's quarterly revenue was up 35.9% on a year-over-year basis. During the same quarter last year, the business earned $0.21 earnings per share. Cloudflare has set its Q3 2026 guidance at 0.340-0.340 EPS and its FY 2026 guidance at 1.250-1.260 EPS. Equities analysts anticipate that Cloudflare, Inc. will post 0.03 earnings per share for the current year.

Insider Activity

In other Cloudflare news, CEO Matthew Prince sold 52,422 shares of the stock in a transaction that occurred on Wednesday, July 1st. The shares were sold at an average price of $249.09, for a total transaction of $13,057,795.98. The sale was disclosed in a legal filing with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Michelle Zatlyn sold 33,003 shares of the stock in a transaction on Wednesday, August 19th. The shares were sold at an average price of $294.63, for a total transaction of $9,723,673.89. Following the transaction, the insider directly owned 69,775 shares in the company, valued at approximately $20,557,808.25. This represents a 32.11% 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. In the last three months, insiders have sold 640,531 shares of company stock worth $168,474,753. 10.66% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the business. HM Payson & Co. bought a new position in shares of Cloudflare in the 4th quarter worth approximately $25,000. Wiser Advisor Group LLC bought a new stake in shares of Cloudflare during the third quarter valued at approximately $26,000. Cornerstone Financial Management LLC grew its stake in Cloudflare by 65.3% in the second quarter. Cornerstone Financial Management LLC now owns 119 shares of the company's stock worth $29,000 after purchasing an additional 47 shares during the period. C M Bidwell & Associates Ltd. bought a new position in Cloudflare in the second quarter worth $30,000. Finally, Wexford Capital LP purchased a new position in Cloudflare during the third quarter valued at $30,000. Institutional investors own 82.68% of the company's stock.

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.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source