Stock of the Day

February 17, 2021

Cloudflare (NET)

$179.41
+$3.08 (+1.7%)
Market Cap: $62.19B

About Cloudflare

Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides 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; and website and application security products comprising web application firewall, bot management, distributed denial of service, API gateways, SSL/TLS encryption, script management, security center, and rate limiting products. It offers website and application performance solutions, including content delivery, load balancing, DNS, agro smart routing, video stream delivery, web optimization, cache reserve, cloudfare waiting room, and cloudfare data localization suite; SASE platform through cloudfare one that provides a cloud-based network-as-a-service; network services which deliver network connectivity, security, and performance, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust services, such as cloudflare access, cloudflare gateway, remote browser isolation, cloud access security broker, cloud email security, and data loss prevention products that protects, inspects, and provides privilege rules to grant access to data and application. Further, it provides developer-based solutions consisting of cloudflare workers, R2 object storage, workers KV, durable objects, cloudfare pages, cloudfare stream, and cloudfare images; and consumer products comprising of 1.1.1.1, a DNS resolver, WARP, a virtual private network, and cloudfare registrar that secures registration and management of domain names. The company serves customers in the technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. Cloudflare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.

Cloudflare Bull Case

Here are some ways that investors could benefit from investing in Cloudflare, Inc.:

  • The current stock price is around $161.54, reflecting a significant market capitalization of approximately $55.99 billion, indicating strong investor interest and confidence in the company's future growth.
  • Cloudflare, Inc. reported a revenue increase of 26.5% year-over-year for the latest quarter, showcasing robust business growth and demand for its services.
  • Analysts have a generally positive outlook, with an average rating of "Hold" and a price target of approximately $141.79, suggesting potential for price appreciation.
  • Institutional ownership is high at 82.68%, which often indicates confidence from large investors in the company's long-term prospects.
  • Recent upgrades from analysts, including price target increases from firms like Cantor Fitzgerald and Morgan Stanley, suggest that market experts see value in Cloudflare, Inc.'s stock.

Cloudflare Bear Case

Investors should be bearish about investing in Cloudflare, Inc. for these reasons:

  • The company has a negative price-to-earnings ratio of -732.66, indicating that it is currently not profitable, which can be a red flag for potential investors.
  • Despite recent growth, analysts project a negative earnings per share of -0.11 for the current year, suggesting challenges in achieving profitability in the near term.
  • Some analysts have issued sell ratings, indicating that there are concerns about the stock's valuation and future performance.
  • Market volatility, as indicated by a beta of 1.78, suggests that the stock may experience larger price swings compared to the overall market, which could pose risks for investors.
  • Recent trading activity shows a decline of 1.6% in stock price during trading hours, which may indicate short-term bearish sentiment among investors.
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