Tomer Zilberman, an analyst from Bank of America Securities, reiterated the Buy rating on Cloudflare. The associated price target is $240.00.
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Tomer Zilberman has given his Buy rating due to a combination of factors that highlight Cloudflare’s strong performance and growth potential. The company’s second-quarter revenue growth of 27.8% surpassed market expectations, and its guidance for the third and fourth quarters also exceeded forecasts. This positive momentum is attributed to the success of Cloudflare’s consumption-based products and improvements in their go-to-market strategies and salesforce.
Additionally, Cloudflare’s growth is driven by an increase in large customers, with revenue from customers spending over $100k annually growing by 35% year-over-year. The company has also seen improvements in sales productivity and deal closure rates. Despite a decline in free cash flow, which is viewed positively as an investment into demand, Cloudflare is strategically positioned to benefit from its AI pay-per-crawl opportunity, potentially monetizing AI-derived content. These factors contribute to Zilberman’s confidence in Cloudflare’s future growth prospects.
In another report released today, Citizens JMP also maintained a Buy rating on the stock with a $250.00 price target.