Cloudflare (NET) AI Stock Analysis

• Market Cap: $70.91B
• Dividend Yield: N/A
• Average Volume (3M): 2.81M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.98
• 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: 1,986,891
• 30 Day Avg. Volume: 2,810,455
• 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: 1.05
• Enterprise Value/Revenue: 36.96
• Enterprise Value/Gross Profit: 49.16
• Enterprise Value/Ebitda: 536.15
• 1Y Price Target: $253.27
• Price Target Upside: 28.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $217.00 ▲(10.32% Upside)

Cloudflare's strong revenue growth and strategic partnerships are significant strengths, driving a positive outlook. However, profitability challenges and high leverage pose risks. The technical indicators suggest a lack of strong momentum, and the valuation reflects ongoing losses. Despite these challenges, the company's strategic investments and improving cash flows support a cautiously optimistic view.

Positive Factors

Revenue Growth

Strong revenue growth indicates expanding market reach and product adoption, supporting long-term business sustainability and competitive positioning.

Strategic Partnerships

Strategic partnerships enhance Cloudflare's service adoption, driving revenue growth and strengthening its competitive edge in the industry.

AI Integration

Integration of AI capabilities positions Cloudflare for future growth, enabling it to offer advanced solutions and maintain technological leadership.

Negative Factors

Profitability Challenges

Ongoing profitability issues may hinder long-term financial stability, requiring strategic focus on cost management and revenue optimization.

High Leverage

High leverage can strain financial flexibility and increase risk, necessitating careful debt management to ensure long-term viability.

Executive Departure

Departure of a key executive could disrupt strategic initiatives and impact leadership continuity, potentially affecting long-term growth plans.

Cloudflare Business Overview & Revenue Model

Company Description

CloudFlare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company offers an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices. Its security products comprise cloud firewall, bot management, distributed denial of service, IoT, SSL/TLS, secure origin connection, and rate limiting products. The company also offers performance solutions, which include content delivery and intelligent routing, as well as content, mobile, and image optimization solutions. In addition, it provides reliability solutions comprising load balancing, anycast network, virtual backbone, DNS, DNS resolver, online, and virtual waiting room solutions. Further, the company offers Cloudflare internal infrastructure solutions, including on-ramps, which connect users, devices, or locations to its network; and filters, which are the products that protect, inspect, and privilege data. Additionally, it provides developer-based solutions, such as serverless computing/programmable network, website development, domain registration, Cloudflare apps, analytics, and data localization management; Consumer DNS Resolver, a consumer app to browse the Internet; and Consumer VPN for consumers to secure and accelerate traffic on mobile devices. The company serves customers in the technology, healthcare, financial services, consumer and retail, and non-profit industries, as well as government. CloudFlare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.

How the Company Makes Money

Cloudflare generates revenue primarily through a subscription-based model, offering tiered pricing plans for its various services, which include enterprise solutions and add-ons. The company has several key revenue streams, including monthly or annual subscriptions for its CDN services, security features, and performance optimization tools. Additionally, Cloudflare offers a free tier to attract new customers, with the hope that they will eventually upgrade to paid plans. Significant partnerships with cloud service providers, technology platforms, and enterprise clients also contribute to its earnings, as these collaborations often lead to increased service adoption and higher revenue from advanced features and services.

Cloudflare Financial Statement Overview

Summary

Cloudflare shows strong revenue growth and efficient cost management, but faces profitability challenges with negative net profit margins. The balance sheet indicates high leverage, posing potential risks, although improving cash flows suggest a positive trajectory towards financial stability.

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	138.79M	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: Negative
• Last Price: 196.70
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NET, the sentiment is Negative. The current price of 196.7 is below the 20-day moving average (MA) of 200.23, below the 50-day MA of 213.89, and above the 200-day MA of 179.98, indicating a neutral trend. The MACD of -2.86 indicates Negative momentum. The RSI at 41.59 is Neutral, neither overbought nor oversold. The STOCH value of 30.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NET.

Cloudflare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANW	73 Outperform	$133.61B	117.90	15.33%	―	15.30%	-60.71%
FTNT	71 Outperform	$61.14B	33.56	228.04%	―	14.78%	22.52%
CRWD	67 Neutral	$127.25B	-385.84	-8.88%	―	22.05%	-341.24%
VRSN	62 Neutral	$22.43B	28.19	―	0.96%	5.47%	-0.03%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NET	61 Neutral	$70.91B	-661.40	-8.88%	―	28.06%	-7.44%
ZS	60 Neutral	$37.68B	-877.71	-2.41%	―	23.24%	-8.83%

Cloudflare Corporate Events

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.