Cloudflare (NET) AI Stock Analysis

• Market Cap: $88.73B
• Dividend Yield: N/A
• Average Volume (3M): 2.46M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.99
• Revenue Growth: 28.06%
• EPS Growth: -7.44%
• Country: US
• Employees: 4,400
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.27
• Shares Outstanding: 315,250,200
• 10 Day Avg. Volume: 2,946,846
• 30 Day Avg. Volume: 2,459,163
• PEG Ratio: 8.02
• Price to Book (P/B): 35.14
• Price to Sales (P/S): 22.02
• P/FCF Ratio: 188.15
• Enterprise Value/Market Cap: 0.84
• Enterprise Value/Revenue: 36.96
• Enterprise Value/Gross Profit: 49.16
• Enterprise Value/Ebitda: 641.63
• 1Y Price Target: $253.95
• Price Target Upside: 0.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 22

• Rating: 67 Neutral
• Price Target: $275.00 ▲(8.57% Upside)

Cloudflare's strong technical indicators and positive earnings call results are the most significant factors driving its stock score. The company's robust revenue growth and strategic partnerships are promising, but high leverage and profitability challenges weigh on its financial performance score. The negative P/E ratio and lack of dividend yield also impact its valuation score.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong market demand and effective scaling of Cloudflare's services, supporting long-term business expansion.

Strategic Partnerships

Strategic partnerships with major companies enhance Cloudflare's market position and provide stable, long-term revenue streams, contributing to sustained growth.

Cash Flow Improvement

Strong free cash flow indicates effective cash management, providing financial flexibility for future investments and supporting long-term operational stability.

Negative Factors

High Leverage

High leverage can limit financial flexibility and increase risk, potentially impacting Cloudflare's ability to invest in growth or weather economic downturns.

Profitability Challenges

Ongoing profitability challenges highlight the need for Cloudflare to improve cost efficiency and scale operations to achieve sustainable long-term profitability.

Gross Margin Decline

The decline in gross margin suggests rising costs or pricing pressures, which could affect profitability and require strategic adjustments to maintain margins.

Cloudflare Business Overview & Revenue Model

Company Description

Cloudflare, Inc. is a leading provider of web infrastructure and website security services. Founded in 2009, the company operates in the technology sector, focusing on enhancing the performance and security of websites, applications, and APIs. Cloudflare offers a suite of products including content delivery network (CDN) services, DDoS mitigation, internet security, and domain registration, aiming to improve user experience and protect against cyber threats for businesses of all sizes.

How the Company Makes Money

Cloudflare generates revenue primarily through a subscription-based model, offering various tiers of services that cater to different customer needs. Their key revenue streams include monthly or annual fees from customers subscribing to their CDN and security services, which vary based on usage levels and features. Additionally, Cloudflare provides enterprise solutions with customized pricing for larger clients, contributing significantly to their earnings. The company also benefits from partnerships with other technology firms and service providers, enhancing their market reach and customer base. Furthermore, by expanding their product offerings and entering new markets, Cloudflare continues to drive growth in its revenue streams.

Cloudflare Financial Statement Overview

Summary

Cloudflare demonstrates strong revenue growth and efficient cost management, but faces challenges in achieving profitability. The balance sheet reflects high leverage, which could be a risk if not managed properly. However, improving cash flows indicate a positive trajectory towards financial stability. The company is positioned well for growth, but must focus on improving profitability and managing debt levels.

Income Statement

Cloudflare's revenue growth has been strong, with a notable increase in recent years, although it has plateaued in the latest TTM period. The company maintains a healthy gross profit margin, indicating efficient cost management. However, persistent negative net profit margins and EBIT margins reflect ongoing profitability challenges, which are common in high-growth tech companies investing heavily in expansion.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio, indicating significant leverage, which could pose risks if not managed carefully. The return on equity remains negative, reflecting ongoing losses. However, the equity ratio is reasonable, suggesting a balanced asset structure.

Cash Flow

Cloudflare's cash flow position is improving, with positive free cash flow growth and a solid operating cash flow to net income ratio. This indicates effective cash management and a potential path to profitability. The free cash flow to net income ratio is positive, suggesting that the company is generating cash despite net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.01B	1.67B	1.30B	975.24M	656.43M	431.06M
Gross Profit	1.51B	1.29B	989.74M	742.63M	509.29M	330.00M
EBITDA	115.97M	62.05M	-42.62M	-92.13M	-125.17M	-43.69M
Net Income	-103.04M	-78.80M	-183.95M	-193.38M	-260.31M	-119.37M
Balance Sheet
Total Assets	5.79B	3.30B	2.76B	2.59B	2.37B	1.38B
Cash, Cash Equivalents and Short-Term Investments	4.04B	1.86B	1.67B	1.65B	1.82B	1.03B
Total Debt	3.50B	1.46B	1.44B	1.58B	1.29B	428.30M
Total Liabilities	4.44B	2.25B	2.00B	1.96B	1.56B	563.71M
Stockholders Equity	1.35B	1.05B	763.05M	623.96M	815.80M	816.94M
Cash Flow
Free Cash Flow	216.38M	195.39M	119.46M	-39.77M	-43.09M	-92.09M
Operating Cash Flow	540.01M	380.43M	254.41M	123.59M	64.65M	-17.13M
Investing Cash Flow	-1.68B	-330.22M	-186.20M	-235.70M	-709.32M	-515.27M
Financing Cash Flow	2.02B	12.79M	-192.19M	6.35M	847.49M	504.91M

Cloudflare Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 253.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NET, the sentiment is Positive. The current price of 253.3 is above the 20-day moving average (MA) of 221.16, above the 50-day MA of 218.27, and above the 200-day MA of 170.94, indicating a bullish trend. The MACD of 5.83 indicates Negative momentum. The RSI at 67.50 is Neutral, neither overbought nor oversold. The STOCH value of 80.35 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NET.

Cloudflare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FTNT	―	$67.06B	34.93	165.17%	―	14.46%	48.06%
PANW	―	$149.07B	137.64	17.45%	―	14.87%	-57.43%
ZS	―	$52.42B	―	-2.70%	―	23.31%	31.04%
NET	―	$88.73B	―	-8.88%	―	28.06%	-7.44%
CRWD	―	$136.27B	―	-8.99%	―	23.46%	-270.07%
VRSN	―	$22.67B	28.49	―	0.62%	5.47%	-0.03%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Cloudflare Corporate Events

Cloudflare’s Earnings Call Highlights Robust Growth and Strategic Wins

Cloudflare’s latest earnings call exuded a positive sentiment, underscored by strong financial and operational results. The company reported robust revenue growth and strategic partnerships as key drivers of its success. Despite the departure of a key executive, Cloudflare’s future outlook remains optimistic, buoyed by increased sales productivity and strategic investments in AI and partnerships.

Cloudflare Reports Strong Q3 2025 Revenue Growth

Cloudflare, Inc. is a leading connectivity cloud company that provides a comprehensive platform of cloud-native products and developer tools aimed at enhancing the speed and security of networks and applications across the globe. The company is known for its extensive network that blocks billions of online threats daily.

Cloudflare Reports Strong Q3 2025 Financial Results

On October 30, 2025, Cloudflare announced its financial results for the third quarter of 2025, reporting a revenue of $562.0 million, marking a 31% increase year-over-year. Despite a GAAP loss from operations of $37.5 million, the company achieved a non-GAAP income from operations of $85.9 million. The results highlight Cloudflare’s accelerating momentum and its strategic focus on innovation and execution, which are expected to expand its influence in the internet industry. Additionally, CJ Desai will step down as President of Product & Engineering on November 7, 2025.

The most recent analyst rating on (NET) stock is a Hold with a $238.00 price target. To see the full list of analyst forecasts on Cloudflare stock, see the NET Stock Forecast page.

Cloudflare’s Earnings Call Highlights Robust Growth

Cloudflare’s recent earnings call painted a picture of robust growth and strategic expansion, despite some financial pressures. The company reported strong revenue growth and operational performance, with notable expansion in customer base and strategic sectors like AI and financial services. While there were concerns about a decrease in gross margin and free cash flow, the positive momentum in revenue growth and strategic initiatives overshadowed these financial challenges.

Cloudflare Reports Strong Q2 2025 Revenue Growth

Cloudflare, Inc. is a leading connectivity cloud company that provides organizations with a platform to enhance the speed, security, and efficiency of their networks and applications. The company is known for its extensive network that blocks billions of online threats daily, serving a diverse range of clients from large corporations to small businesses and non-profits globally.