Cloudflare (NYSE:NET) Upgraded to “Hold” at Zacks Research

Zacks Research upgraded shares of Cloudflare (NYSE:NET) from a strong sell rating to a hold rating in a research report sent to investors on Tuesday,Zacks reports.

NET has been the topic of several other research reports. Needham & Company LLC raised their price target on shares of Cloudflare from $280.00 to $380.00 and gave the company a “buy” rating in a research report on Friday, August 7th. KeyCorp increased their target price on shares of Cloudflare from $300.00 to $375.00 and gave the stock an “overweight” rating in a research note on Friday, August 7th. Weiss Ratings restated a “sell (d-)” rating on shares of Cloudflare in a research report on Thursday, October 15th. Guggenheim upped their target price on Cloudflare from $140.00 to $160.00 and gave the stock a “sell” rating in a research note on Friday, August 7th. Finally, TD Cowen lowered Cloudflare from a “buy” rating to a “hold” rating in a research report on Tuesday. Twenty-four investment analysts have rated the stock with a Buy rating, eight have issued a Hold rating and five have issued a Sell rating to the company’s stock. Based on data from MarketBeat.com, Cloudflare has an average rating of “Moderate Buy” and an average price target of $333.21.

Cloudflare Trading Down 2.6%

Shares of NYSE:NET opened at $266.54 on Tuesday. The company has a market capitalization of $94.21 billion, a PE ratio of -459.54, a P/E/G ratio of 211.89 and a beta of 1.37. The company has a current ratio of 1.82, a quick ratio of 1.82 and a debt-to-equity ratio of 1.22. Cloudflare has a 12-month low of $158.83 and a 12-month high of $370.35. The business’s fifty day simple moving average is $319.83 and its 200-day simple moving average is $249.01.

Cloudflare (NYSE:NET) last posted its quarterly earnings data on Thursday, August 6th. The company reported $0.29 earnings per share (EPS) for the quarter, beating the consensus estimate of $0.27 by $0.02. The firm had revenue of $696.06 million for the quarter, compared to the consensus estimate of $664.66 million. Cloudflare had a negative net margin of 8.21% and a negative return on equity of 3.88%. The company’s revenue for the quarter was up 35.9% compared to the same quarter last year. During the same quarter in the prior year, the company posted $0.21 earnings per share. As a group, equities research analysts predict that Cloudflare will post 0.03 earnings per share for the current fiscal year.

Insider Activity

In related 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 value of $9,156,022.29. Following the completion of the transaction, 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 Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, Director Carl Ledbetter sold 5,000 shares of the firm’s stock in a transaction on Monday, September 14th. The shares were sold at an average price of $312.22, for a total value of $1,561,100.00. Following the completion of the transaction, the director owned 878,073 shares in the company, valued at $274,151,952.06. The trade was a 0.57% decrease in their position. The disclosure for this sale is available in the SEC filing. 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 over the last quarter. 10.66% of the stock is currently owned by corporate insiders.

Institutional Investors Weigh In On Cloudflare

A number of large investors have recently modified their holdings of NET. Andra AP fonden raised its holdings in shares of Cloudflare by 44.5% during the 2nd quarter. Andra AP fonden now owns 48,356 shares of the company’s stock worth $11,861,000 after acquiring an additional 14,900 shares during the period. Plato Investment Management Ltd purchased a new position in Cloudflare during the second quarter worth about $1,499,000. Insight Holdings Group LLC acquired a new position in Cloudflare in the 1st quarter valued at about $6,768,000. Independent Financial Group LLC acquired a new position in Cloudflare in the 1st quarter valued at about $3,484,000. Finally, Capula Management Ltd grew its stake in shares of Cloudflare by 97.1% in the 1st quarter. Capula Management Ltd now owns 13,526 shares of the company’s stock valued at $2,791,000 after buying an additional 6,662 shares during the period. Hedge funds and other institutional investors own 82.68% of the company’s stock.

Key Headlines Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: JPMorgan upgraded Cloudflare from Neutral to Overweight after the recent selloff, arguing the decline has improved the risk-reward and that revenue growth could accelerate. The bank set a $350 price target. JPMorgan upgrades Cloudflare to Overweight
• Positive Sentiment: A Polen Capital investor letter pointed to accelerating revenue growth and a raised outlook as reasons for an outperform view on NET, offering a constructive long-term growth perspective. Cloudflare shares outperform following accelerating revenue growth and raised outlook
• Neutral Sentiment: Cloudflare’s upcoming Q3 results are the key near-term catalyst. The earnings preview coverage highlights the report and investor focus on what comes next for NET, but provides no results yet. Cloudflare reports Q3 results tomorrow
• Negative Sentiment: Valuation remains a concern ahead of earnings. NET has retreated from its October high, while reported insider selling and options-market signals point to caution about a possible post-earnings decline. Insiders sell as options market points to a drop after earnings
• Negative Sentiment: Jefferies lowered its price target to $320 from $350, reflecting a more cautious outlook even though the revised target remains above the price cited in the coverage. Jefferies lowers Cloudflare price target

About Cloudflare

Cloudflare, Inc (NYSE: NET) provides cloud connectivity, security and performance services for websites, applications, corporate networks and other internet-connected resources. Its global network is designed to help organizations improve the reliability, speed and security of digital services while reducing the complexity of managing internet infrastructure.

The company’s offerings include content delivery and authoritative domain name system services, distributed denial-of-service protection, web application and application programming interface security, bot management, and network security tools.