Cloudflare (NYSE:NET) Shares Gap Up After Earnings Beat

Cloudflare, Inc. (NYSE:NET) shares gapped up prior to trading on Wednesday after the company announced better than expected quarterly earnings. The stock had previously closed at $179.98, but opened at $203.05. Cloudflare shares last traded at $198.11, with a volume of 5,328,346 shares traded.

The company reported $0.28 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.27 by $0.01. Cloudflare had a negative return on equity of 7.40% and a negative net margin of 4.72%.The firm had revenue of $614.51 million during the quarter, compared to analysts’ expectations of $591.67 million. During the same period last year, the business posted $0.19 earnings per share. The company’s revenue for the quarter was up 33.6% compared to the same quarter last year.

Key Cloudflare News

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Q4 beat and bullish guidance: Cloudflare reported revenue of $614.5M (+33.6% YoY) and EPS of $0.28, topping estimates, and issued a 2026 revenue target (~$2.795B) that signals sustained AI-driven demand and record contract activity. CNBC: Q4 results
• Positive Sentiment: Analyst upgrades/target increases: Multiple firms raised targets or upgraded NET (e.g., Robert W. Baird upgrade to outperform with a $260 PT; Wells Fargo and Barclays raised targets), supporting further upside expectations. Zacks: Analyst optimism
• Positive Sentiment: Unusual options activity: Elevated call buying (≈13,474 calls traded, ~11% above average) suggests some traders are placing bullish bets on further upside. No link
• Neutral Sentiment: Valuation/sector checks: Several pieces examine whether the stock’s elevated valuation is justified after the AI-fueled beat — useful reading for investors weighing entry points. Yahoo: Valuation check
• Neutral Sentiment: Cantor Fitzgerald reaffirmed a neutral rating ($224 PT), highlighting mixed analyst sentiment despite the strong quarter. StreetInsider: Cantor Fitzgerald
• Negative Sentiment: Insider sale disclosed: Director John Graham‑Cumming sold 2,520 shares (small relative to his stake), which can trigger short-term caution among some investors. SEC: Form 4
• Negative Sentiment: Institutional trimming: Alfreton Capital reported a ~55% reduction in its stake, signaling some profit-taking by funds after the run-up. DefenseWorld: Alfreton selling
• Negative Sentiment: Some target trims: A few analysts trimmed price targets (e.g., Scotiabank to $225, Needham trimmed PT) — mixed signals that add short‑term volatility risk. TickerReport: PT cuts

Analysts Set New Price Targets

A number of analysts recently issued reports on NET shares. Stifel Nicolaus increased their price target on shares of Cloudflare from $230.00 to $275.00 and gave the stock a “buy” rating in a report on Friday, October 31st. Truist Financial set a $225.00 target price on shares of Cloudflare in a research note on Tuesday, January 20th. Oppenheimer began coverage on Cloudflare in a research report on Monday, November 10th. They set an “outperform” rating and a $260.00 target price on the stock. Piper Sandler upped their price target on Cloudflare from $220.00 to $222.00 and gave the stock a “neutral” rating in a report on Wednesday. Finally, Barclays raised their price objective on Cloudflare from $235.00 to $250.00 and gave the company an “overweight” rating in a report on Wednesday. One research analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, eight have assigned a Hold rating and two have assigned a Sell rating to the stock. According to data from MarketBeat, Cloudflare has a consensus rating of “Moderate Buy” and an average price target of $232.89.

Insiders Place Their Bets

In other news, insider Michelle Zatlyn sold 35,099 shares of Cloudflare stock in a transaction on Thursday, November 20th. The stock was sold at an average price of $199.26, for a total transaction of $6,993,826.74. Following the transaction, the insider owned 24,555 shares in the company, valued at $4,892,829.30. The trade was a 58.84% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, CFO Thomas J. Seifert sold 41,555 shares of Cloudflare stock in a transaction dated Thursday, November 20th. The stock was sold at an average price of $194.18, for a total transaction of $8,069,149.90. Following the transaction, the chief financial officer directly owned 137,486 shares in the company, valued at $26,697,031.48. This trade represents a 23.21% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders have sold 633,347 shares of company stock valued at $124,873,834. Insiders own 10.89% of the company’s stock.

Hedge Funds Weigh In On Cloudflare

Several large investors have recently modified their holdings of the business. Empowered Funds LLC lifted its position in Cloudflare by 34.2% in the first quarter. Empowered Funds LLC now owns 6,656 shares of the company’s stock valued at $750,000 after buying an additional 1,696 shares during the last quarter. Sivia Capital Partners LLC acquired a new stake in shares of Cloudflare in the second quarter valued at $424,000. IFP Advisors Inc boosted its holdings in Cloudflare by 32.7% in the second quarter. IFP Advisors Inc now owns 2,049 shares of the company’s stock valued at $401,000 after purchasing an additional 505 shares during the period. Apollon Wealth Management LLC raised its position in Cloudflare by 25.9% in the 2nd quarter. Apollon Wealth Management LLC now owns 3,696 shares of the company’s stock valued at $724,000 after purchasing an additional 761 shares in the last quarter. Finally, Johnson Investment Counsel Inc. acquired a new position in shares of Cloudflare during the second quarter worth about $224,000. Institutional investors and hedge funds own 82.68% of the company’s stock.

Cloudflare Price Performance

The stock’s 50 day moving average is $190.36 and its two-hundred day moving average is $204.79. The stock has a market capitalization of $64.97 billion, a PE ratio of -639.56, a price-to-earnings-growth ratio of 164.18 and a beta of 1.97. The company has a debt-to-equity ratio of 1.46, a current ratio of 2.04 and a quick ratio of 2.04.

Cloudflare Company Profile

Cloudflare, Inc is a global web infrastructure and security company that provides a suite of services designed to improve the performance, reliability and security of internet properties. Its core offerings include a content delivery network (CDN), distributed denial-of-service (DDoS) protection, managed DNS, and a web application firewall (WAF). Cloudflare also provides tools for bot management, SSL/TLS, load balancing and rate limiting to help organizations maintain uptime and protect web applications from attack.

In addition to traditional edge and security services, Cloudflare has expanded into edge computing and developer platforms.