Cloudflare (NET) AI Stock Analysis

• Market Cap: $67.95B
• Dividend Yield: N/A
• Average Volume (3M): 3.18M
• 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: 3,762,425
• 30 Day Avg. Volume: 3,177,227
• 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: 1.10
• Enterprise Value/Revenue: 36.96
• Enterprise Value/Gross Profit: 49.16
• Enterprise Value/Ebitda: 536.15
• 1Y Price Target: $249.41
• Price Target Upside: 28.57% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 25
• EPS Forecast (FY): 0.91
• Revenue Forecast (FY): $2.14B

• Rating: 58 Neutral
• Price Target: $210.00 ▲(8.25% Upside)

Cloudflare's strong revenue growth and strategic partnerships are significant positives, as highlighted in the earnings call. However, the company's high leverage and ongoing profitability challenges weigh on its financial performance score. Technical indicators suggest bearish momentum, and the valuation is impacted by a negative P/E ratio. Despite these challenges, the company's strategic investments and improving cash flows provide a positive outlook.

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. (NET) is a leading web infrastructure and security company that provides a broad range of services to enhance the performance and security of websites and applications. Founded in 2009, Cloudflare operates in the technology sector, focusing on content delivery network (CDN) services, internet security, and distributed domain name server services. Its core products include DDoS protection, web application firewalls, SSL/TLS encryption, and performance optimization tools, catering to businesses of all sizes across various industries.

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: 193.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• 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 193.99 is below the 20-day moving average (MA) of 218.05, below the 50-day MA of 218.25, and above the 200-day MA of 177.04, indicating a neutral trend. The MACD of -8.00 indicates Positive momentum. The RSI at 40.30 is Neutral, neither overbought nor oversold. The STOCH value of 23.24 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
FTNT	71 Outperform	$59.32B	32.84	228.04%	―	14.78%	22.52%
PANW	68 Neutral	$128.17B	116.64	15.33%	―	15.30%	-60.71%
CRWD	65 Neutral	$127.19B	―	-8.99%	―	23.46%	-270.07%
ZS	63 Neutral	$43.53B	―	-2.70%	―	23.31%	31.04%
VRSN	62 Neutral	$23.14B	29.08	―	0.93%	5.47%	-0.03%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
NET	58 Neutral	$67.95B	―	-8.88%	―	28.06%	-7.44%

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.