Cloudflare (NET) just caught fresh attention after Barclays kicked off coverage with a bullish stance, sending the stock up about 4% as investors reassessed its growth story in cloud, AI, and cybersecurity.
See our latest analysis for Cloudflare.
That fresh bullish coverage comes after a choppy stretch, with a roughly 20 percent slide following a high profile outage. Yet the share price still shows an 81.6 percent year to date return and an 84.6 percent total shareholder return over one year, suggesting longer term momentum is intact even as near term volatility reflects shifting views on risk and execution.
If this kind of rebound story has your attention, it is also worth exploring other high growth tech and AI stocks that are driving growth narratives across cloud and AI.
With shares still trading below bullish analyst targets despite a stellar multi year run, the key question now is whether Cloudflare is mispriced after the pullback or if the market is already baking in years of AI fueled growth.
With Cloudflare last closing at $204.35 versus a narrative fair value of about $242, the spotlight is firmly on whether ambitious growth projections can hold.
Cloudflare’s early action building strategic positioning around the emerging Agentic Web and “Act 4” initiatives, leveraging its unique reach across 20% of the Internet and broad AI partnerships, offers significant optionality for new high-margin transaction-based business models that could unlock new revenue streams and expand the addressable market.
To see the math behind this upside call, including the compounding of rapid revenue growth, rising margins, and a future earnings multiple that assumes breakout status, explore the full narrative and review which numbers are doing the heavy lifting.
Result: Fair Value of $242.46 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, heavy reliance on large enterprise customers and intensifying competition from hyperscalers could disrupt growth assumptions and challenge that bullish valuation narrative.
Find out about the key risks to this Cloudflare narrative.
While the narrative fair value points to upside, our look at a simple price to sales check paints a far hotter picture. Cloudflare trades at 35.6 times sales versus 2.5 times for the US IT sector and a fair ratio of 15.2 times, which implies meaningful valuation risk if sentiment cools.
See what the numbers say about this price — find out in our valuation breakdown.
If you see the story differently or want to dig into the numbers yourself, you can build a custom view of Cloudflare in just a few minutes: Do it your way.
A great starting point for your Cloudflare research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.
Do not stop with just one compelling story. Use the Simply Wall Street Screener to uncover fresh opportunities that match your strategy before the market moves on.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include NET.
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