Cloudflare (NYSE:NET) Stock Jumps 1.5% - Time to Buy?

Key Points

• Cloudflare shares rose 1.5% to about $319.62, while trading volume was 15% below its average.
• Latest quarterly results beat estimates: EPS was $0.38 versus $0.34 expected, and revenue increased 39.2% year over year to $782.5 million. Reports also cited raised sales guidance and strong enterprise and AI demand.
• Analysts’ consensus is Moderate Buy, with an average price target of $338.48, though some coverage warns the stock may be richly valued and vulnerable to a pullback.

Cloudflare, Inc. (NYSE:NET - Get Free Report) shot up 1.5% on Thursday. The company traded as high as $322.61 and last traded at $319.6170. Approximately 3,455,747 shares traded hands during mid-day trading, a decline of 15% from the average daily volume of 4,086,462 shares. The stock had previously closed at $315.00.

Cloudflare News Roundup

Investors following NET have been watching these news items:

• Positive Sentiment: Coverage of the company’s third-quarter results highlights revenue growth of 39%, a revenue beat, raised fourth-quarter and full-year sales guidance, and an earlier target for GAAP profitability. Broad enterprise and AI-related demand were cited as drivers. Read More.
• Neutral Sentiment: Wall Street’s average recommendation is bullish, but analyst ratings can be overly optimistic and should not be treated as a standalone reason to invest. Read More.
• Negative Sentiment: Some coverage questions whether NET’s strong run has left the shares fully priced and flags the possibility of a further pullback, which could limit near-term upside even as fundamentals improve. Read More. · Read More.

Analyst Ratings Changes

Several analysts have commented on the stock. Stephens assumed coverage on shares of Cloudflare in a research note on Tuesday, November 3rd. They issued an "overweight" rating on the stock. Scotiabank dropped their price objective on shares of Cloudflare from $390.00 to $360.00 and set a "sector outperform" rating for the company in a research note on Friday, November 6th. Oppenheimer began coverage on shares of Cloudflare in a report on Tuesday, November 3rd. They issued an "outperform" rating on the stock. Craig Hallum raised shares of Cloudflare to a "buy" rating in a report on Tuesday, November 3rd. Finally, BTIG Research lifted their target price on Cloudflare from $382.00 to $413.00 and gave the stock a "buy" rating in a report on Tuesday, October 6th. Twenty-six research analysts have rated the stock with a Buy rating, seven have assigned a Hold rating and three have issued a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus target price of $338.48.

Cloudflare Price Performance

The firm has a market capitalization of $112.98 billion, a P/E ratio of -470.02, a P/E/G ratio of 176.15 and a beta of 1.37. The stock's fifty day simple moving average is $318.72 and its 200 day simple moving average is $251.76. The company has a debt-to-equity ratio of 3.03, a current ratio of 3.80 and a quick ratio of 3.80.

Cloudflare (NYSE:NET - Get Free Report) last issued its quarterly earnings results on Thursday, November 5th. The company reported $0.38 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $0.34 by $0.04. Cloudflare had a negative return on equity of 6.05% and a negative net margin of 8.75%. The business had revenue of $782.51 million for the quarter, compared to the consensus estimate of $737.16 million. During the same period in the prior year, the firm posted $0.27 earnings per share. The business's quarterly revenue was up 39.2% on a year-over-year basis. On average, equities research analysts predict that Cloudflare, Inc. will post 0.04 EPS for the current year.

Insider Buying and Selling at Cloudflare

In other news, insider Michelle Zatlyn sold 33,003 shares of the firm's stock in a transaction dated Tuesday, September 8th. The shares were sold at an average price of $277.43, for a total value of $9,156,022.29. Following the transaction, the insider directly owned 69,775 shares of the company's stock, valued at approximately $19,357,678.25. This trade represents a 32.11% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is available at 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 business's stock in a transaction dated Monday, September 14th. The stock was sold at an average price of $312.22, for a total transaction of $1,561,100.00. Following the transaction, the director owned 878,073 shares in the company, valued at $274,151,952.06. The trade was a 0.57% decrease in their ownership of the stock. 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 sold 256,537 shares of company stock valued at $78,750,901 over the last quarter. 10.66% of the stock is currently owned by insiders.

Institutional Inflows and Outflows

Several institutional investors have recently modified their holdings of the stock. GK Wealth Management LLC purchased a new position in Cloudflare in the third quarter worth approximately $25,000. Cornerstone Financial Management LLC grew its holdings in shares of Cloudflare by 65.3% in the second quarter. Cornerstone Financial Management LLC now owns 119 shares of the company's stock valued at $29,000 after purchasing an additional 47 shares in the last quarter. C M Bidwell & Associates Ltd. acquired a new position in shares of Cloudflare in the second quarter valued at approximately $30,000. CX Institutional increased its stake in Cloudflare by 49.4% during the 2nd quarter. CX Institutional now owns 133 shares of the company's stock worth $33,000 after buying an additional 44 shares during the period. Finally, Cape Investment Advisory Inc. purchased a new stake in Cloudflare during the 2nd quarter worth approximately $33,000. Hedge funds and other institutional investors own 82.68% of the company's stock.

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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