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Cloudflare’s Strong Growth Potential and Strategic Positioning Drive Buy Rating

Cloudflare’s Strong Growth Potential and Strategic Positioning Drive Buy Rating

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.

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