Cloudflare initiated with an Underperform at BofA

BofA initiated coverage of Cloudflare with an Underperform rating and $52 price target. The company faces “two major challenges” in softening enterprise demand and convincing customers to adopt new solutions like Zero Trust and Edge Compute, the analyst tells investors in a research note. The firm believes Cloudflare’s challenges to address the enterprise market could drive lower estimates than the Street anticipates. It finds the stock expensive versus peers.