Royal Bank Of Canada Increases Cloudflare (NYSE:NET) Price Target to $346.00

Key Points

• Royal Bank of Canada raised Cloudflare’s price target from $290 to $346 and maintained an “outperform” rating, implying approximately 16.3% upside from the reported share price.
• Cloudflare exceeded quarterly expectations, reporting adjusted EPS of $0.29 versus $0.27 expected and revenue of $696.1 million, up 35.9% year over year. Analysts maintain a consensus “Moderate Buy” rating with an average price target of $309.44.
• Shares rose to $297.59, but the company continues to trade at an exceptionally high valuation and has a negative net margin. Recent insider selling, including transactions by the CFO and other executives, may also weigh on investor sentiment.

Cloudflare (NYSE:NET - Get Free Report) had its price objective boosted by investment analysts at Royal Bank Of Canada from $290.00 to $346.00 in a research note issued on Friday,Benzinga reports. The brokerage presently has an "outperform" rating on the stock. Royal Bank Of Canada's target price indicates a potential upside of 16.27% from the company's current price.

NET has been the topic of several other reports. Susquehanna boosted their price objective on Cloudflare from $190.00 to $200.00 and gave the stock a "neutral" rating in a research note on Monday, May 11th. Truist Financial lifted their target price on Cloudflare from $300.00 to $350.00 and gave the stock a "buy" rating in a report on Friday. Benchmark downgraded Cloudflare to an "underperform" rating in a research report on Tuesday, July 7th. Morgan Stanley reissued an "overweight" rating and set a $370.00 target price on shares of Cloudflare in a research report on Friday. Finally, Stifel Nicolaus set a $260.00 price target on Cloudflare in a report on Friday, May 8th. Two analysts have rated the stock with a Strong Buy rating, twenty-two have assigned a Buy rating, six have given a Hold rating and three have given a Sell rating to the company's stock. According to MarketBeat.com, the stock has a consensus rating of "Moderate Buy" and a consensus price target of $309.44.

Cloudflare Price Performance

Shares of NYSE:NET traded up $13.16 on Friday, reaching $297.59. The company's stock had a trading volume of 6,863,901 shares, compared to its average volume of 4,324,323. Cloudflare has a 52-week low of $158.83 and a 52-week high of $324.73. The company has a market cap of $105.19 billion, a P/E ratio of -1,191.09, a PEG ratio of 219.10 and a beta of 1.65. The company has a 50-day simple moving average of $255.83 and a 200 day simple moving average of $218.26. The company has a debt-to-equity ratio of 1.29, a quick ratio of 1.96 and a current ratio of 1.96.

Cloudflare (NYSE:NET - Get Free Report) last posted its earnings results on Wednesday, August 5th. 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 for the quarter, compared to the consensus estimate of $664.66 million. Cloudflare had a negative net margin of 3.72% and a negative return on equity of 5.65%. The business's quarterly revenue was up 35.9% on a year-over-year basis. During the same period in the previous year, the firm posted $0.21 EPS. As a group, equities research analysts anticipate that Cloudflare will post 0.03 EPS for the current fiscal year.

Insiders Place Their Bets

In other Cloudflare news, insider Michelle Zatlyn sold 35,080 shares of Cloudflare stock in a transaction on Friday, May 22nd. The stock was sold at an average price of $213.98, for a total transaction of $7,506,418.40. Following the completion of the sale, the insider directly owned 47,425 shares of the company's stock, valued at $10,148,001.50. The trade was a 42.52% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Thomas J. Seifert sold 55,000 shares of Cloudflare stock in a transaction on Tuesday, August 4th. The shares were sold at an average price of $300.30, for a total value of $16,516,500.00. Following the sale, the chief financial officer directly owned 113,790 shares of the company's stock, valued at approximately $34,171,137. This trade represents a 32.58% decrease in their ownership of the stock. 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 749,532 shares of company stock worth $183,882,628 in the last ninety days. 10.66% of the stock is owned by company insiders.

Institutional Trading of Cloudflare

A number of hedge funds have recently added to or reduced their stakes in the business. CX Institutional raised its holdings in Cloudflare by 49.4% in the second quarter. CX Institutional now owns 133 shares of the company's stock valued at $33,000 after acquiring an additional 44 shares in the last quarter. Wealth Architects LLC grew its holdings in Cloudflare by 4.6% during the 2nd quarter. Wealth Architects LLC now owns 1,022 shares of the company's stock worth $251,000 after acquiring an additional 45 shares in the last quarter. Forum Financial Management LP grew its holdings in Cloudflare by 3.5% during the 2nd quarter. Forum Financial Management LP now owns 1,498 shares of the company's stock worth $367,000 after acquiring an additional 50 shares in the last quarter. Quadrant Private Wealth Management LLC increased its position in shares of Cloudflare by 3.2% in the 1st quarter. Quadrant Private Wealth Management LLC now owns 1,653 shares of the company's stock worth $341,000 after purchasing an additional 51 shares during the last quarter. Finally, Essential Partners LLC increased its position in shares of Cloudflare by 14.5% in the 1st quarter. Essential Partners LLC now owns 402 shares of the company's stock worth $83,000 after purchasing an additional 51 shares during the last quarter. 82.68% of the stock is owned by hedge funds and other institutional investors.

Cloudflare News Summary

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Cloudflare beat estimates on revenue and earnings. Second-quarter revenue rose 35.9% year over year to $696.1 million, above the approximately $664.7 million consensus, while adjusted EPS of $0.29 exceeded estimates of $0.27. Growth was supported by large-customer additions, adoption of the Workers developer platform and stronger execution. Cloudflare Q2 earnings beat estimates
• Positive Sentiment: Management raised its financial outlook above Wall Street expectations. Cloudflare forecast third-quarter revenue of approximately $736 million to $737 million and EPS of $0.34, both ahead of consensus. Full-year revenue guidance was lifted to roughly $2.864 billion to $2.870 billion, while full-year EPS guidance was raised to $1.25-$1.26 versus an earlier consensus near $0.96. Cloudflare raises annual outlook
• Positive Sentiment: AI-related demand is strengthening the growth narrative. Rising traffic from AI agents is increasing usage of Cloudflare’s network and security services. The company also launched Kitesurf, a cloud-hosted browser designed for AI agents, and introduced tools such as its AEO Visibility Dashboard to help businesses monitor visibility in AI-generated recommendations. Cloudflare launches Kitesurf
• Positive Sentiment: Analysts responded with higher targets. BTIG, Citizens JMP, Needham, Oppenheimer and Truist raised their price targets, with several maintaining Buy or Outperform ratings. The revisions reflect improved estimates for AI infrastructure demand and Cloudflare’s execution.
• Neutral Sentiment: Investor expectations are elevated. Cloudflare’s rally has pushed its valuation to exceptionally high levels, and the company continues to report a negative net margin. Sustaining rapid growth, improving profitability and converting AI demand into recurring revenue will be important for further gains.
• Negative Sentiment: Insider selling remains a sentiment risk. CEO Matthew Prince sold more than $45 million of shares in several transactions, and director Carl Ledbetter sold about $1.4 million. The sales were made under pre-arranged Rule 10b5-1 plans and do not necessarily indicate weakening business prospects, but they may concern investors after the stock’s advance.

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.

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