Cloudflare (NET) AI Stock Analysis

• Market Cap: $78.06B
• Dividend Yield: N/A
• Average Volume (3M): 2.27M
• Price to Earnings (P/E): ―
• Beta (1Y): 2.00
• Revenue Growth: 27.32%
• EPS Growth: -11.94%
• Country: US
• Employees: 4,400
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.21
• Shares Outstanding: 312,872,200
• 10 Day Avg. Volume: 2,110,933
• 30 Day Avg. Volume: 2,265,433
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 35.90
• Enterprise Value/Gross Profit: 47.16
• Enterprise Value/Ebitda: 493.38
• 1Y Price Target: $222.76
• Price Target Upside: -0.55% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 24

• Rating: 69 Neutral
• Price Target: $238.00 ▲(6.25% Upside)

Cloudflare's strong revenue growth and strategic customer expansion are key strengths, supported by robust operational progress. However, profitability challenges and valuation concerns weigh on the overall score. The technical analysis suggests potential volatility, while the earnings call indicates confidence in continued growth despite economic uncertainties.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, reinforcing Cloudflare's competitive position.

Strategic Partnerships

Partnership with Visa enhances Cloudflare's market reach and credibility in secure digital transactions, supporting long-term growth.

Customer Expansion

Growth in large customers signifies strong product adoption and loyalty, contributing to stable and predictable revenue streams.

Negative Factors

Profitability Challenges

Ongoing profitability issues may limit reinvestment capabilities and affect long-term financial sustainability.

Gross Margin Decline

Declining gross margins could indicate rising costs or pricing pressures, potentially impacting future profitability.

High Leverage

High leverage increases financial risk and may constrain future borrowing capacity, affecting strategic flexibility.

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 various tiers of services that cater to different customer needs. Their key revenue streams include monthly or annual fees from customers subscribing to their CDN and security services, which vary based on usage levels and features. Additionally, Cloudflare provides enterprise solutions with customized pricing for larger clients, contributing significantly to their earnings. The company also benefits from partnerships with other technology firms and service providers, enhancing their market reach and customer base. Furthermore, by expanding their product offerings and entering new markets, Cloudflare continues to drive growth in its revenue streams.

Cloudflare Financial Statement Overview

Summary

Cloudflare shows strong revenue growth and improving operational efficiency, despite challenges with profitability and leverage. Cash reserves are solid, supporting future initiatives.

Income Statement

Cloudflare has demonstrated strong revenue growth with a TTM revenue of $1.88 billion, up from $1.67 billion in 2024 and $1.30 billion in 2023. Gross Profit Margin remains high at approximately 76%, indicating effective cost management. However, the company is still facing profitability challenges with a negative Net Income and EBIT, highlighting ongoing operational expenses and investments in growth. Despite these, the EBITDA margin has shown improvement, suggesting better operational efficiency.

Balance Sheet

The balance sheet shows a strong cash position with $3.96 billion in cash and short-term investments. The Debt-to-Equity ratio is relatively high, indicating significant leverage, but the substantial equity of $1.24 billion supports financial stability. Return on Equity remains negative due to net losses, but the company maintains a healthy Equity Ratio of approximately 22%, indicating a stable asset base.

Cash Flow

Cloudflare's cash flow statement reflects robust operating cash flow generation at $477 million, with Free Cash Flow growing to $246 million, a significant increase from previous years. This improvement in cash flow metrics signals effective cash management strategies, which are critical for sustaining growth and reducing reliance on external financing. The Operating Cash Flow to Net Income ratio is positive, indicating efficient conversion of revenue into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.88B	1.67B	1.30B	975.24M	656.43M	431.06M
Gross Profit	1.43B	1.29B	989.74M	742.63M	509.29M	330.00M
EBITDA	136.91M	65.87M	-42.62M	-92.13M	-125.17M	-43.69M
Net Income	-117.08M	-78.80M	-183.95M	-193.38M	-260.31M	-119.37M
Balance Sheet
Total Assets	5.56B	3.30B	2.76B	2.59B	2.37B	1.38B
Cash, Cash Equivalents and Short-Term Investments	3.96B	1.86B	1.67B	1.65B	1.82B	1.03B
Total Debt	3.46B	1.46B	1.44B	1.58B	1.29B	428.30M
Total Liabilities	4.32B	2.25B	2.00B	1.96B	1.56B	563.71M
Stockholders Equity	1.24B	1.05B	763.05M	623.96M	815.80M	816.94M
Cash Flow
Free Cash Flow	179.18M	195.39M	119.46M	-39.77M	-43.09M	-92.09M
Operating Cash Flow	477.62M	380.43M	254.41M	123.59M	64.65M	-17.13M
Investing Cash Flow	-1.13B	-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: Positive
• Last Price: 223.99
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 223.99 is above the 20-day moving average (MA) of 217.56, above the 50-day MA of 214.81, and above the 200-day MA of 168.44, indicating a bullish trend. The MACD of 1.01 indicates Negative momentum. The RSI at 57.41 is Neutral, neither overbought nor oversold. The STOCH value of 82.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for NET.

Cloudflare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PANW	―	$146.96B	137.67	17.45%	―	14.87%	-57.43%
FTNT	―	$65.56B	34.04	165.17%	―	14.46%	48.06%
ZS	―	$51.13B	―	-2.70%	―	23.31%	31.04%
NET	―	$78.06B	―	-11.04%	―	27.32%	-11.94%
CRWD	―	$132.33B	―	-8.99%	―	23.46%	-270.07%
VRSN	―	$22.28B	28.00	―	0.62%	5.47%	-0.03%
Sector *	―	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Cloudflare Corporate Events

Cloudflare’s Earnings Call Highlights Robust Growth

Cloudflare’s recent earnings call painted a picture of robust growth and strategic expansion, despite some financial pressures. The company reported strong revenue growth and operational performance, with notable expansion in customer base and strategic sectors like AI and financial services. While there were concerns about a decrease in gross margin and free cash flow, the positive momentum in revenue growth and strategic initiatives overshadowed these financial challenges.

Cloudflare Reports Strong Q2 2025 Revenue Growth

Cloudflare, Inc. is a leading connectivity cloud company that provides organizations with a platform to enhance the speed, security, and efficiency of their networks and applications. The company is known for its extensive network that blocks billions of online threats daily, serving a diverse range of clients from large corporations to small businesses and non-profits globally.

Cloudflare Reports Q2 2025 Revenue Growth of 28%

On July 31, 2025, Cloudflare announced its financial results for the second quarter of fiscal 2025, reporting a 28% year-over-year revenue increase to $512.3 million. Despite a GAAP loss from operations, the company achieved non-GAAP income from operations of $72.3 million. Cloudflare’s strategic focus on innovation and expanding customer investments has positioned it well for future growth, as highlighted by CEO Matthew Prince. The company expects continued revenue growth in the third quarter and full fiscal year 2025, with projections of up to $544.5 million and $2.115 billion, respectively.

The most recent analyst rating on (NET) stock is a Buy with a $140.00 price target. To see the full list of analyst forecasts on Cloudflare stock, see the NET Stock Forecast page.