Cloudflare (NET)
NYSE:NET
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Cloudflare
(NYSE:NET)
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Rating:57Neutral
Price Target:
$219.00
▲(3.45% Upside)
Action:ReiteratedDate:02/12/26
NET scores mid-range primarily due to strong earnings-call guidance and improving cash generation, which offset ongoing GAAP profitability shortfalls and higher balance-sheet leverage. The score is further constrained by weak technical trends (price below key moving averages with negative MACD) and limited valuation support given the negative P/E and no dividend yield.
Positive Factors
Improving cash generation and FCF
Sustained, improving operating cash flow and materially positive free cash flow provide durable funding for network CapEx, R&D, and go-to-market expansion without immediate equity raises. Strong FCF reduces execution risk and supports balance-sheet flexibility during multi-year scaling.
Negative Factors
Material increase in leverage
Sharp rise in debt raises refinancing and interest-rate risk and constrains financial flexibility until profitability is consistently positive. Elevated leverage increases the need for sustained free-cash-flow generation to service obligations and limits downside protection during slower growth periods.
Read all positive and negative factors
Positive Factors
Negative Factors
Improving cash generation and FCF
Sustained, improving operating cash flow and materially positive free cash flow provide durable funding for network CapEx, R&D, and go-to-market expansion without immediate equity raises. Strong FCF reduces execution risk and supports balance-sheet flexibility during multi-year scaling.
Read all positive factors
Cloudflare (NET) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$74.51B
Dividend YieldN/A
Average Volume (3M)3.89M
Price to Earnings (P/E)―
Beta (1Y)1.62
Revenue Growth28.06%
EPS Growth-7.44%
CountryUS
Employees4,400
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.28
Shares Outstanding317,576,100
10 Day Avg. Volume3,462,284
30 Day Avg. Volume3,885,619
Financial Highlights & Ratios
PEG Ratio-25.75
Price to Book (P/B)47.08
Price to Sales (P/S)31.69
P/FCF Ratio211.80
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue35.61
Enterprise Value/Gross Profit47.68
Enterprise Value/Ebitda325.14
Forecast
1Y Price Target
$232.00Price Target Upside9.59% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering27
EPS Forecast (FY)1.12
Revenue Forecast (FY)$2.79B
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,...
How the Company Makes Money
Cloudflare primarily makes money by selling subscription-based cloud services to customers on contracted terms, typically priced by service tier, usage, and/or the scope of deployment (e.g., number of domains, applications, users, traffic, or secu...
Cloudflare Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where Cloudflare is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where Cloudflare is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyCloudflare Earnings Call Summary
Earnings Call Date:Feb 10, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented strong top-line acceleration, robust enterprise momentum, record new ACV, substantial customer additions, improving retention, and materially stronger free cash flow and profitability — all signaling successful execution of go-to-market and product strategies. Headwinds include a modest gross-margin decline (below target), higher network expense allocation and capital intensity, and increasing revenue variability from usage-based pool-of-funds deals. On balance, the positive operational and financial momentum, large-enterprise wins, AI-driven demand tailwind, and cash generation materially outweigh the margin and variability challenges.Positive Updates
Strong Revenue Growth
Total revenue of $614.5M in Q4 FY2025, up 34% year-over-year, with FY2026 guidance of $2.785B–$2.795B (up 28%–29% YoY) and Q1 2026 revenue guide of $620M–$621M (up 29%–30% YoY).
Negative Updates
Gross Margin Pressure
Fourth-quarter gross margin was 74.9%, down 270 basis points YoY and 40 basis points sequentially, falling just below the stated long-term target range (75%–77%). Management attributed the decline to higher paid-traffic allocation to COGS and mix impacts from the developer platform.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Revenue Growth
Total revenue of $614.5M in Q4 FY2025, up 34% year-over-year, with FY2026 guidance of $2.785B–$2.795B (up 28%–29% YoY) and Q1 2026 revenue guide of $620M–$621M (up 29%–30% YoY).
Read all positive updates
Company Guidance
Cloudflare guided Q1 2026 revenue of $620.0M–$621.0M (up ~29%–30% year‑over‑year), operating income of $70M–$71M, an effective tax rate of 20%, and diluted EPS of $0.23 assuming ~377M shares outstanding; for full‑year 2026 it expects revenue of $2.785B–$2.795B (up ~28%–29% year‑over‑year), operating income of $378M–$382M, an effective tax rate of 20%, diluted EPS of $1.11–$1.12 (≈377M shares assuming cash settlement of 2026 convertible notes), with revenue weighted ~46% in H1, expected network CapEx of ~12%–15% of revenue for the year, and management saying it is comfortable with consensus free cash flow estimates for 2026.Cloudflare Financial Statement Overview
Summary
Income Statement
56
Neutral
Balance Sheet
44
Neutral
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.17B | 1.67B | 1.30B | 975.24M | 656.43M |
| Gross Profit | 1.61B | 1.29B | 989.74M | 742.63M | 509.29M |
| EBITDA | 207.43M | 62.05M | -42.62M | -92.13M | -125.17M |
| Net Income | -102.27M | -78.80M | -183.95M | -193.38M | -260.31M |
Balance Sheet | |||||
| Total Assets | 6.04B | 3.30B | 2.76B | 2.59B | 2.37B |
| Cash, Cash Equivalents and Short-Term Investments | 4.10B | 1.86B | 1.67B | 1.65B | 1.82B |
| Total Debt | 3.70B | 1.46B | 1.44B | 1.58B | 1.29B |
| Total Liabilities | 4.58B | 2.25B | 2.00B | 1.96B | 1.56B |
| Stockholders Equity | 1.46B | 1.05B | 763.05M | 623.96M | 815.80M |
Cash Flow | |||||
| Free Cash Flow | 324.32M | 195.39M | 119.46M | -39.77M | -43.09M |
| Operating Cash Flow | 666.87M | 380.43M | 254.41M | 123.59M | 64.65M |
| Investing Cash Flow | -1.81B | -330.22M | -186.20M | -235.70M | -709.32M |
| Financing Cash Flow | 1.94B | 12.79M | -192.19M | 6.35M | 847.49M |
Cloudflare Technical Analysis
Positive
211.69
Price Trends
192.12
Positive
195.98
Positive
201.68
Positive
Market Momentum
4.25
Positive
55.13
Neutral
47.02
Neutral
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 211.69 is above the 20-day moving average (MA) of 210.29, above the 50-day MA of 192.12, and above the 200-day MA of 201.68, indicating a bullish trend. The MACD of 4.25 indicates Positive momentum. The RSI at 55.13 is Neutral, neither overbought nor oversold. The STOCH value of 47.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NET.
Cloudflare Risk Analysis
Cloudflare disclosed 79 risk factors in its most recent earnings report. Cloudflare reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Cloudflare Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $133.18B | 71.18 | 15.49% | ― | 15.30% | -60.71% | |
72 Outperform | $61.07B | 31.84 | 123.64% | ― | 14.78% | 22.52% | |
70 Outperform | $23.83B | 27.19 | -40.40% | 0.94% | 5.47% | -0.03% | |
69 Neutral | $101.22B | -686.05 | -4.68% | ― | 22.05% | -341.24% | |
66 Neutral | $22.28B | -232.70 | -3.48% | ― | 23.24% | -8.83% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $74.51B | -671.68 | -7.48% | ― | 28.06% | -7.44% |
* Technology Sector Average
NET
Cloudflare
211.69
113.33
115.22%
FTNT
Fortinet
82.53
-5.47
-6.22%
PANW
Palo Alto Networks
163.21
10.77
7.07%
VRSN
Verisign
259.85
27.39
11.78%
ZS
Zscaler
138.56
-41.50
-23.05%
CRWD
CrowdStrike Holdings
399.12
74.76
23.05%
Cloudflare Corporate Events
Business Operations and StrategyFinancial Disclosures
Cloudflare Highlights Strong Q4 Growth and Improving Profitability
Positive
Feb 10, 2026
On February 10, 2026, Cloudflare reported fourth-quarter and full-year 2025 results showing strong top-line growth and improving profitability metrics, underpinned by rising demand from AI- and agent-driven Internet workloads. Fourth-quarter reven...
Executive/Board Changes
Cloudflare Announces Planned Transition in Chief Legal Leadership
Neutral
Feb 10, 2026
On February 6, 2026, Cloudflare, Inc. announced that its Chief Legal Officer, Doug Kramer, has decided to resign from his role after nearly a decade with the company, with his resignation to take effect on March 31, 2026. Following his departure f...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.