NET Cloudflare, Inc. - Fundamental Analysis
NEUTRAL
NET Stock | Fundamental Analysis & Investment Insights
NASDAQ
•
Technology
•
Software - Infrastructure
Current Price
$196.02
Analyst Target
$240.01
+22.4% Upside
52W High
$260.0
52W Low
$89.42
At a glance
Key valuation, profitability, growth, and risk metrics.
Updated Jan 04, 2026
Market cap
$68.66B
P/E
N/A
ROE
-8.9%
Profit margin
-5.1%
Debt/Equity
2.6
Dividend yield
N/A
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
68%
Analysis Accuracy
The Advanced Deterministic Scorecard reveals a deeply conflicting profile: the Piotroski F-Score of 2/9 signals weak financial health, while the Altman Z-Score of 84247246907.2 indicates an extremely low distress risk, likely due to high market valuation and strong liquidity. Despite negative profitability metrics and a concerning insider sell-off, Cloudflare demonstrates exceptional revenue growth of 30.7% YoY and consistent earnings surprises, with a 775% YoY EPS growth. Valuation multiples are extremely elevated (P/S of 34.1, P/B of 50.97), far above sector averages, reflecting aggressive growth pricing. The stock trades at a premium to its $240.01 analyst target, balancing strong momentum and growth against weak fundamentals and bearish insider activity.
Key Strengths
Exceptional revenue growth (30.7% YoY), significantly above sector average of 19.85%
Outstanding gross margin of 75.20%, indicating strong pricing power and scalable business model
Consistently beats earnings estimates, with 9 of last 10 quarters showing positive surprises
Extremely high Altman Z-Score (84247246907.2) suggests negligible bankruptcy risk despite unprofitability
Strong analyst consensus with a 'buy' recommendation from 30 analysts and a $240.01 target price
Key Risks
Very weak Piotroski F-Score of 2/9, indicating poor financial health across profitability, leverage, and operating efficiency
Negative profit and operating margins (-5.12% and -6.67%) with no clear path to sustained profitability
Extremely high valuation multiples (Forward P/E of 166.54, P/S of 34.10) create vulnerability to multiple contraction
Bearish insider sentiment with $110.15M in net insider sales over last 6 months, including CFO and President
Technical trend at 0/100 and recent price weakness (-4.1% in 1M, -3.1% in 1W) suggest deteriorating momentum
AI Fair Value Estimate
Based on comprehensive analysis
$240.01
+22.4% above current price
Performance Snowflake
Multi-dimensional analysis across 5 key categories
Overall
44
Moderate
35
80
65
40
0
AI Verdict
Neutral with growth premium and fundamental weaknesses
Key drivers: High growth and earnings beat streak support premium valuation, Exceptional Altman Z-Score offsets weak Piotroski score, Bearish insider activity and technical trend weigh on sentiment, Valuation multiples are stretched relative to peers and historical norms, Negative ROE and ROA indicate capital inefficiency despite scale
Confidence
70%
Value
35/100
Ref P/E, PEG, Graham Number
Positives
- Analyst target price implies 22.4% upside from current levels
Watchpoints
- Forward P/E of 166.54 is extremely high
- Price/Sales of 34.10 and Price/Book of 50.97 are among highest in sector
- No Graham Number due to unprofitability
Future
80/100
Ref Growth rates
Positives
- 30.7% YoY revenue growth well above peer average
- 775% YoY EPS growth and 28.6% Q/Q EPS growth indicate accelerating profitability
- Consistent earnings surprises suggest underestimated growth
Watchpoints
No urgent risks highlighted.
Past
65/100
Ref Historical trends
Positives
- Long streak of positive earnings surprises (15+ quarters)
- Revenue growth has accelerated from ~20% to 30%+ range
- Price has appreciated 162.8% over 5 years
Watchpoints
- Persistent unprofitability with negative margins over multiple years
- Recent 1-month and 1-week price declines break prior uptrend
Health
40/100
Ref Altman Z-Score, Piotroski F-Score
Positives
- Altman Z-Score of 84247246907.2 indicates near-zero bankruptcy risk
- Current ratio of 2.04 and quick ratio of 1.99 suggest strong short-term liquidity
Watchpoints
- Piotroski F-Score of 2/9 indicates weak financial health
- Debt/Equity of 2.60 is high, especially for a tech company
- Negative ROE (-8.88%) and ROA (-2.71%)
Dividend
0/100
Ref Yield, Payout
Positives
No standout positives identified.
Watchpoints
- No dividend paid (yield N/A)
- Dividend strength score of 0/100
- Payout ratio is 0% but irrelevant due to lack of dividend policy
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Current Price
$196.02
Analyst Target
$240.01
Upside/Downside
+22.4%
Multi-Horizon Performance vs Peers
Price momentum across 5Y → 1W horizons for NET and closest competitors.
Updated 2026-01-02
| Company | 5Y | 3Y | 1Y | 6M | 1M | 1W |
|---|---|---|---|---|---|---|
|
NET
Cloudflare, Inc.
Primary
|
+162.8% | +355.6% | +74.2% | +2.5% | -4.1% | -3.1% |
|
TEL
TE Connectivity plc
Peer
|
+132.0% | +96.8% | +57.4% | +45.9% | +6.6% | -2.1% |
|
GLW
Corning Incorporated
Peer
|
+154.6% | +161.6% | +78.8% | +72.4% | -4.9% | -3.7% |
|
SNPS
Synopsys, Inc.
Peer
|
+75.3% | +16.6% | -28.9% | -24.2% | -10.6% | -0.9% |
|
SNOW
Snowflake Inc.
Peer
|
-22.1% | +59.9% | +37.6% | -2.2% | -18.2% | -3.2% |
Positive values indicate cumulative gains over the specified period. Comparables pulled from the same sector to highlight whether momentum is stock-specific or industry-wide.
Historical Performance Trends
Long-term financial metrics and growth patterns
Revenue & Net Income
Profit & Operating Margins
Return on Equity (ROE)
Quarterly Revenue Growth
Historical data shows last 12 quarters (3 years)
Valuation Metrics
Key valuation ratios and pricing indicators
P/E Ratio
N/A
Forward P/E
166.54
PEG Ratio
N/A
P/B Ratio
50.97
P/S Ratio
34.1
EV/Revenue
33.83
EV/EBITDA
-1399.18
Market Cap
$68.66B
Profitability
Profit margins and return metrics
Profit Margin
-5.12%
Operating Margin
-6.67%
Gross Margin
75.2%
ROE
-8.88%
ROA
-2.71%
Growth
Revenue and earnings growth rates
Revenue Growth
+30.7%
Earnings Growth
N/A
Q/Q Revenue Growth
N/A
Q/Q Earnings Growth
N/A
Financial Health
Balance sheet strength and liquidity metrics
Debt/Equity
2.6
High debt
Current Ratio
2.04
Strong
Quick Ratio
1.99
Excellent
Cash/Share
$11.54
Quarterly Earnings History
EPS performance vs analyst estimates
2026-02-05
$N/A
2025-10-30
$0.27
+15.4% surprise
2025-07-31
$0.21
+15.5% surprise
2025-05-08
$0.16
-1.6% surprise
Technology Sector Comparison
Comparing NET against 50 companies in the Technology sector
(10 bullish, 40 neutral, 0 bearish)
Return on Equity (ROE)
-8.88%
This Stock
vs
29.27%
Sector Avg
-130.3%
(Below Avg)
Profit Margin
-5.12%
This Stock
vs
17.13%
Sector Avg
-129.9%
(Weaker)
Debt to Equity
2.6
This Stock
vs
0.79
Sector Avg
+230.0%
(Higher)
Revenue Growth
30.7%
This Stock
vs
19.33%
Sector Avg
+58.8%
(Fast Growth)
Current Ratio
2.04
This Stock
vs
1.93
Sector Avg
+5.5%
(Better)
Similar Companies
Peer comparison within the same industry
| Company | AI Rating | Market Cap | P/E | ROE | Profit Margin | Price | |
|---|---|---|---|---|---|---|---|
|
NET
Cloudflare, Inc.
|
NEUTRAL | $68.66B | - | -8.9% | -5.1% | $196.02 | |
|
TEL
TE Connectivity plc
|
BULLISH | $69.82B | 38.47 | 14.6% | 10.7% | $237.33 | |
|
GLW
Corning Incorporated
|
NEUTRAL | $70.61B | 52.6 | 12.7% | 9.2% | $82.06 | |
|
SNPS
Synopsys, Inc.
|
NEUTRAL | $73.17B | 52.61 | 6.5% | 31.0% | $389.83 | |
|
SNOW
Snowflake Inc.
|
NEUTRAL | $74.16B | - | -53.1% | -30.8% | $216.71 |
Recent Insider Trading
Insider buy and sell transactions from the last 6 months
| Date | Insider | Position | Transaction | Shares | Value |
|---|---|---|---|---|---|
| 2025-12-30 | LEDBETTER CARL | Director | Sale | 8,866 | $1,786,141 |
| 2025-12-22 | SUDER KATRIN | Director | Sale | 2,031 | $406,200 |
| 2025-12-22 | SEIFERT THOMAS J | Chief Financial Officer | Sale | 10,000 | $2,016,931 |
| 2025-12-22 | SEIFERT THOMAS J | Chief Financial Officer | Stock Award | 10,000 | - |
| 2025-12-15 | GRAHAM-CUMMING JOHN | Director | Sale | 2,520 | $502,425 |
| 2025-12-15 | GRAHAM-CUMMING JOHN | Director | Option Exercise | 2,520 | $112,694 |
| 2025-12-11 | ZATLYN MICHELLE | President | Sale | 76,923 | $15,888,932 |
| 2025-12-11 | ZATLYN MICHELLE | President | Stock Award | 76,923 | - |
| 2025-12-05 | PRINCE MATTHEW | Chief Executive Officer | Sale | 157,152 | $31,801,472 |
| 2025-12-05 | PRINCE MATTHEW | Chief Executive Officer | Stock Award | 134,977 | - |
| 2025-12-01 | HAWKINS MARK J | Director | Sale | 134 | $26,485 |
| 2025-12-01 | KRAMER DOUGLAS JAMES | Officer | Sale | 3,000 | $590,509 |
| 2025-11-24 | ZATLYN MICHELLE | President | Sale | 86,381 | $16,665,788 |
| 2025-11-24 | ZATLYN MICHELLE | President | Stock Award | 76,923 | - |
| 2025-11-20 | SEIFERT THOMAS J | Chief Financial Officer | Sale | 41,555 | $8,069,178 |
Insider transactions can signal confidence or concerns about company prospects
Wall Street Analysts
Professional analyst ratings and price targets
Consensus
BUY
30 analysts
Barclays
2025-12-02
Overweight
Argus Research
2025-11-10
Buy
Buy
Citigroup
2025-11-03
Buy
Buy
Susquehanna
2025-11-03
Neutral
Neutral
Wells Fargo
2025-10-31
Overweight
Overweight
Piper Sandler
2025-10-31
Neutral
Neutral
UBS
2025-10-31
Neutral
Neutral
Scotiabank
2025-10-31
Sector Perform
Sector Perform
RBC Capital
2025-10-31
Outperform
Outperform
Stifel
2025-10-31
Buy
Buy