Analyst Mike Cikos from Needham maintained a Buy rating on Cloudflare and increased the price target to $285.00 from $240.00.
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Mike Cikos has given his Buy rating due to a combination of factors that highlight Cloudflare’s promising growth trajectory and strategic initiatives. The company’s management has set an ambitious target of achieving a $3 billion revenue run-rate by the end of 2026, which implies a robust year-over-year growth rate of approximately 28%. This target reflects management’s confidence in their strategic shift from a product-focused approach to an enterprise-scale sales model, which has already shown significant improvements.
Cloudflare’s Net Dollar Retention (NDR) rate has improved by 5 percentage points sequentially, reaching 119%, indicating strong customer retention and expansion. Additionally, the company has seen accelerating growth in its high-value customer segments, specifically those contributing $1 million and $5 million in revenue, for the fourth consecutive quarter. Cloudflare’s plans to expand its sales capacity and enhance sales productivity further support the positive outlook, making the stock a compelling buy according to Cikos.
In another report released today, TD Cowen also reiterated a Buy rating on the stock with a $265.00 price target.