Cloudflare (NYSE:NET) Stock Falls 8.5% – Time to Sell?

Cloudflare, Inc. (NYSE:NET) traded down 8.5% during mid-day trading on Thursday. The stock traded as low as $233.62 and last traded at $243.7880. 8,035,082 shares changed hands during trading, an increase of 99% from the average session volume of 4,037,998 shares. The stock had previously closed at $266.58.

Key Stories Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Third-quarter revenue rose 39.2% year over year to $782.5 million, beating estimates, while adjusted EPS of $0.38 also topped forecasts. The company cited strong enterprise demand and growing adoption of its developer platform. Cloudflare Q3 Earnings Beat Estimates on Robust Enterprise Demand
• Positive Sentiment: Cloudflare raised its 2026 outlook: full-year revenue guidance is about $3.0 billion and EPS guidance is $1.35, above consensus estimates. Fourth-quarter revenue guidance of $845 million–$846 million and EPS guidance of $0.43 also exceeded expectations. Why Cloudflare Stock Opened Higher Today
• Positive Sentiment: Further signs of AI-related momentum include Cloudflare’s first revenue from AI bot traffic and a developer base that doubled to 10 million. Analysts at Wolfe Research upgraded the shares to Outperform. Why Cloudflare Stock Opened Higher Today
• Neutral Sentiment: Analyst actions were mixed: Piper Sandler reaffirmed Overweight and raised its target, while Scotiabank, Needham and Cantor Fitzgerald lowered targets; the latter firms retained positive or neutral ratings. Scotiabank rating update
• Negative Sentiment: Some profitability measures lagged growth: gross margin faced pressure, free cash flow grew more slowly than revenue, and the GAAP operating loss widened. Cloudflare’s high valuation may make the stock sensitive to any slowdown or disappointment. Cloudflare Sales Up 39%, Gross Margin Falls

Analyst Ratings Changes

A number of research analysts have recently commented on NET shares. BTIG Research lifted their price objective on shares of Cloudflare from $382.00 to $413.00 and gave the company a “buy” rating in a research report on Tuesday, October 6th. Scotiabank cut their target price on shares of Cloudflare from $390.00 to $360.00 and set a “sector outperform” rating for the company in a research note on Friday. Raymond James Financial cut Cloudflare from a “strong-buy” rating to an “underperform” rating in a report on Tuesday. Truist Financial boosted their price target on Cloudflare from $300.00 to $350.00 and gave the stock a “buy” rating in a research report on Friday, August 7th. Finally, Citigroup reissued a “market outperform” rating on shares of Cloudflare in a research report on Monday, August 31st. Twenty-six analysts have rated the stock with a Buy rating, seven have issued a Hold rating and four have issued a Sell rating to the company’s stock. According to data from MarketBeat, the company presently has an average rating of “Moderate Buy” and a consensus target price of $332.82.

Cloudflare Price Performance

The company has a quick ratio of 1.82, a current ratio of 1.82 and a debt-to-equity ratio of 1.22. The company’s 50 day moving average is $318.23 and its 200 day moving average is $249.77. The firm has a market capitalization of $95.15 billion, a price-to-earnings ratio of -395.88, a P/E/G ratio of 210.90 and a beta of 1.37.

Cloudflare (NYSE:NET) last issued its quarterly earnings data on Thursday, November 5th. The company reported $0.38 earnings per share for the quarter, topping the consensus estimate of $0.34 by $0.04. The business had revenue of $782.51 million during the quarter, compared to analysts’ expectations of $737.16 million. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The business’s revenue was up 39.2% on a year-over-year basis. During the same quarter in the previous year, the company earned $0.27 EPS. On average, equities research analysts anticipate that Cloudflare, Inc. will post 0.03 earnings per share for the current fiscal year.

Insiders Place Their Bets

In other news, insider Michelle Zatlyn sold 33,003 shares of the stock in a transaction on Tuesday, September 8th. The stock was sold at an average price of $277.43, for a total transaction of $9,156,022.29. Following the sale, the insider directly owned 69,775 shares of the company’s stock, valued at approximately $19,357,678.25. This represents a 32.11% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Carl Ledbetter sold 5,000 shares of the stock in a transaction on Monday, September 14th. The stock was sold at an average price of $312.22, for a total value of $1,561,100.00. Following the sale, the director directly owned 878,073 shares in the company, valued at approximately $274,151,952.06. This trade represents a 0.57% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders have sold a total of 259,057 shares of company stock worth $79,516,905 in the last 90 days. Company insiders own 10.66% of the company’s stock.

Institutional Investors Weigh In On Cloudflare

Several institutional investors and hedge funds have recently bought and sold shares of NET. Jennison Associates LLC boosted its position in shares of Cloudflare by 135.8% during the 1st quarter. Jennison Associates LLC now owns 4,394,484 shares of the company’s stock worth $906,758,000 after acquiring an additional 2,530,872 shares in the last quarter. Sumitomo Mitsui Trust Group Inc. lifted its stake in Cloudflare by 4.9% during the third quarter. Sumitomo Mitsui Trust Group Inc. now owns 1,046,812 shares of the company’s stock worth $363,537,000 after purchasing an additional 48,956 shares during the last quarter. Amundi lifted its stake in Cloudflare by 2.0% during the first quarter. Amundi now owns 1,707,256 shares of the company’s stock worth $352,275,000 after purchasing an additional 32,804 shares during the last quarter. National Pension Service boosted its holdings in shares of Cloudflare by 1.6% in the 2nd quarter. National Pension Service now owns 959,987 shares of the company’s stock valued at $235,466,000 after purchasing an additional 15,546 shares in the last quarter. Finally, Swiss National Bank boosted its holdings in shares of Cloudflare by 8.1% in the 1st quarter. Swiss National Bank now owns 927,200 shares of the company’s stock valued at $191,318,000 after purchasing an additional 69,800 shares in the last quarter. Institutional investors own 82.68% of the company’s stock.

Cloudflare Company Profile

Cloudflare, Inc provides cloud-based services that help businesses and other organizations protect, connect and improve the performance of websites, applications and networks. Its global network delivers services including content delivery, domain name system management, and protection against distributed denial-of-service attacks and other cyber threats.

The company also offers web application security, bot management and Zero Trust services for securing access to applications and internal networks.