Robert W. Baird analyst Shrenik Kothari maintained a Hold rating on Cloudflare (NET – Research Report) yesterday and set a price target of $145.00.
Shrenik Kothari has given his Hold rating due to a combination of factors influencing Cloudflare’s current market position. The company’s long-term growth potential is promising, driven by AI-driven expansion and a broadening global network, which reinforces confidence in its future prospects. However, the current high valuation limits immediate upside potential, suggesting that investors may need to exercise patience in the short term.
Despite a strong enterprise pipeline and federal traction, elongated sales cycles, particularly in large AI and security deployments, introduce near-term uncertainties. While Cloudflare’s shift towards consumption-based contracts offers growth opportunities, it also brings revenue variability in the short term. The company’s ambitious expansion into new markets and products, such as Zero Trust and AI, presents significant long-term opportunities, but the immediate financial impact remains limited. Therefore, the Hold rating reflects a balanced view of potential risks and rewards, pending clear evidence of sustained enterprise momentum and profitability improvements.
In another report released on March 3, Piper Sandler also maintained a Hold rating on the stock with a $153.00 price target.