Stocks

Cloudflare Shares Surge – Is It a Good Buy?

Published January 2, 2025

Cloudflare, Inc. (NYSE:NET) experienced a significant surge in its stock price as it gapped up before the market opened on Thursday. The stock concluded the previous trading day at $107.68 but opened at a higher price of $114.50. In recent trading, Cloudflare shares were observed at $114.48, with a considerable volume of 1,008,140 shares exchanged.

Wall Street Analysts Forecast Growth

Cloudflare's recent performance has attracted attention from various Wall Street analysts. For instance, UBS Group upgraded its price target for Cloudflare from $88.00 to $95.00, assigning the stock a "neutral" rating in their report published on November 8. Similarly, Jefferies Financial Group raised its target from $100.00 to $125.00, maintaining a "hold" rating on December 19. Mizuho also increased its price target for Cloudflare from $102.00 to $125.00, categorizing the stock as "neutral" as of November 13. In another analysis, Scotiabank adjusted its price objective from $85.00 to $87.00, giving the company a "sector perform" rating on November 8. Additionally, BNP Paribas initiated coverage on Cloudflare on October 8, delivering an "underperform" rating with a price target set at $65.00. From the research conducted, it's evident that three analysts have rated the stock as a sell, twelve maintain a hold rating, and thirteen suggest a buy. MarketBeat reports that the consensus rating for Cloudflare is currently "Hold," with an average price target estimated at $100.48.

Check Out Our Latest Stock Report on NET

Cloudflare Trading Up 5.5%

According to recent trends, the stock has experienced an increase of 5.5%. The company's 50-day moving average stands at $101.84, while the 200-day moving average is at $88.66. Financial metrics reveal a debt-to-equity ratio of 1.32, with both the current and quick ratios at 3.37. Furthermore, Cloudflare's market capitalization is noted at $38.98 billion, alongside a PE ratio of -436.85 and a beta of 1.10.

On November 7, Cloudflare disclosed its quarterly earnings report, revealing that the company recorded an EPS of ($0.03), aligning with the consensus estimate. Additionally, Cloudflare reported a negative return on equity of 7.18% and a negative net margin of 5.97%. The total revenue accounted for the quarter was $430.08 million, surpassing the consensus estimate of $423.65 million. Analysts anticipate that Cloudflare will report an EPS of -0.1 for the current fiscal year.

Insider Buying and Selling

In terms of insider transactions, Douglas James Kramer, an insider, sold 3,000 shares of Cloudflare on November 1 at an average price of $88.60, amounting to a total sale value of $265,800. Following this transaction, he holds 185,386 shares valued at approximately $16,425,199.60, reflecting a decrease of 1.59% in his position. Additionally, COO Michelle Zatlyn divested 64,100 shares on October 7 at an average price of $81.60, totaling $5,230,560. After this sale, Zatlyn owns 192,177 shares worth roughly $15,681,643.20, representing a 25.01% decrease in her holdings. Over the past three months, insiders have sold a total of 614,592 shares valued at $60,146,600, with insiders holding 12.83% of the company's stock.

Institutional Trading of Cloudflare

Recent activity among institutional investors also shows significant changes. Marshall Wace LLP increased its stake in Cloudflare by 123.4% during the second quarter, after acquiring an additional 855,334 shares, bringing their total to 1,548,535 shares valued at $128,265,000. Moreover, WIM INVESTMENT MANAGEMENT Ltd initiated a new position in the third quarter, acquiring shares worth $25,588,000. American Century Companies Inc. enhanced its holdings by 24.8% during the second quarter, now owning 1,394,732 shares valued at $115,526,000 after a purchase of 277,228 shares. Glynn Capital Management LLC also bought a new position in Cloudflare worth $16,765,000 during the second quarter. Lastly, International Assets Investment Management LLC acquired a new stake in Cloudflare during the third quarter valued at approximately $147,160,000. It’s noteworthy that institutional investors currently own 82.68% of Cloudflare's shares.

Cloudflare Company Profile

Cloudflare, Inc. serves as a cloud services provider, offering a wide array of services to businesses globally. The company specializes in providing integrated cloud-based security solutions tailored to protect various combinations of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices. Furthermore, it delivers website and application security products, which encompass web application firewalls, bot management, distributed denial of service protection, API gateways, SSL/TLS encryption, script management, security center, and rate limiting solutions.