Critical Survey: Cloudflare (NYSE:NET) versus Broadridge Financial Solutions (NYSE:BR)

Broadridge Financial Solutions (NYSE:BR) and Cloudflare (NYSE:NET) are both large-cap computer and technology companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, dividends, earnings and valuation.

Institutional and Insider Ownership

90.0% of Broadridge Financial Solutions shares are owned by institutional investors. Comparatively, 82.7% of Cloudflare shares are owned by institutional investors. 1.1% of Broadridge Financial Solutions shares are owned by company insiders. Comparatively, 10.9% of Cloudflare shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Broadridge Financial Solutions and Cloudflare”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Broadridge Financial Solutions	$6.89 billion	2.58	$839.50 million	$9.34	16.43
Cloudflare	$2.17 billion	39.43	-$102.27 million	($0.25)	-967.27

Broadridge Financial Solutions has higher revenue and earnings than Cloudflare. Cloudflare is trading at a lower price-to-earnings ratio than Broadridge Financial Solutions, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Broadridge Financial Solutions and Cloudflare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Broadridge Financial Solutions	15.03%	40.14%	12.87%
Cloudflare	-3.72%	-5.65%	-1.34%

Volatility and Risk

Broadridge Financial Solutions has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Cloudflare has a beta of 1.7, suggesting that its share price is 70% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Broadridge Financial Solutions and Cloudflare, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Broadridge Financial Solutions	0	4	4	0	2.50
Cloudflare	3	7	18	0	2.54

Broadridge Financial Solutions presently has a consensus target price of $221.57, suggesting a potential upside of 44.37%. Cloudflare has a consensus target price of $236.68, suggesting a potential downside of 2.12%. Given Broadridge Financial Solutions’ higher probable upside, analysts plainly believe Broadridge Financial Solutions is more favorable than Cloudflare.

Summary

Broadridge Financial Solutions beats Cloudflare on 9 of the 14 factors compared between the two stocks.

About Broadridge Financial Solutions

Broadridge Financial Solutions, Inc. provides investor communications and technology-driven solutions for the financial services industry. The company's Investor Communication Solutions segment processes and distributes proxy materials to investors in equity securities and mutual funds, as well as facilitates related vote processing services; and distributes regulatory reports, class action, and corporate action/reorganization event information, as well as tax reporting solutions. It also offers ProxyEdge, an electronic proxy delivery and voting solution; data-driven solutions and an end-to-end platform for content management, composition, and omni-channel distribution of regulatory, marketing, and transactional information, as well as mutual fund trade processing services; solutions for public corporations and mutual funds; data and analytics solutions; SEC filing and capital markets transaction services; registrar, stock transfer, and record-keeping services; and omni-channel customer communications solutions, as well as operates Broadridge Communications Cloud platform that creates, delivers, and manages communications and customer engagement activities. Its Global Technology and Operations segment provides solutions that automate the front-to-back transaction lifecycle of equity, mutual fund, fixed income, foreign exchange and exchange-traded derivatives, order capture and execution, trade confirmation, margin, cash management, clearing and settlement, reference data management, reconciliations, securities financing and collateral management, asset servicing, compliance and regulatory reporting, portfolio accounting, and custody-related services. This segment also offers business process outsourcing services; technology solutions, such portfolio management, compliance, fee billing, and operational support solutions; and capital market and wealth and investment management solutions. The company was founded in 1962 and is headquartered in Lake Success, New York.

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.