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

Shares of Cloudflare, Inc. (NYSE:NET) gapped up prior to trading on Wednesday following a stronger than expected earnings report. 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 trading hands.

The company reported $0.28 earnings per share for the quarter, beating analysts’ consensus estimates of $0.27 by $0.01. Cloudflare had a negative return on equity of 6.54% and a negative net margin of 5.12%.The company had revenue of $614.51 million for the quarter, compared to analyst estimates of $591.67 million. During the same quarter in the previous year, the company earned $0.19 EPS. The firm’s revenue for the quarter was up 33.6% compared to the same quarter last year.

Key Stories Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Q4 beat and upbeat guide — Cloudflare reported $0.28 EPS (vs. $0.27 est.) and $614.5M revenue (+33.6% YoY) and outlined a $2.795B 2026 revenue target, citing AI-driven demand and a record $42.5M-per-year ACV deal; management framed this as durable enterprise momentum. Q4 results press release
• Positive Sentiment: Market narrative around AI tailwind — Coverage highlights that Cloudflare’s services benefit from AI-driven internet traffic growth, supporting the company’s above-consensus sales forecast and investor enthusiasm. Barron’s article
• Positive Sentiment: Analyst conviction still shows upside — Needham lowered its target from $285 to $250 but kept a Buy rating, implying ~39% upside from current levels, which supports continued investor interest. Needham / TickerReport
• Neutral Sentiment: Mixed but constructive analyst moves — Cantor Fitzgerald reaffirmed a Neutral rating with a $224 target and Scotiabank trimmed its target to $225 (sector perform); both targets still imply meaningful upside versus current price, providing tempered endorsement. Benzinga coverage
• Negative Sentiment: Insider/institutional selling — Alfreton Capital disclosed a 55% reduction in its Cloudflare stake, a potentially negative signal about near-term conviction from that holder. Alfreton Capital filing
• Negative Sentiment: Price vs. moving averages & valuation context — The stock is trading below its 50-day ($191) and 200-day ($205) SMAs and still reflects negative net margin and a non?standard P/E profile, factors that could temper further upside if momentum fades. MarketBeat profile

Analyst Upgrades and Downgrades

A number of equities research analysts have commented on NET shares. Wolfe Research reissued a “peer perform” rating on shares of Cloudflare in a report on Monday, January 26th. Jefferies Financial Group reiterated a “hold” rating on shares of Cloudflare in a report on Wednesday. KeyCorp reissued an “overweight” rating on shares of Cloudflare in a report on Wednesday. Citigroup lowered their target price on shares of Cloudflare from $318.00 to $260.00 and set a “buy” rating on the stock in a research report on Friday, January 16th. Finally, Argus lifted their price target on shares of Cloudflare from $238.00 to $265.00 and gave the company a “buy” rating in a research report on Monday, November 10th. One analyst has rated the stock with a Strong Buy rating, nineteen have issued a Buy rating, eight have assigned a Hold rating and two have given a Sell rating to the company’s stock. According to MarketBeat.com, the stock presently has a consensus rating of “Moderate Buy” and an average price target of $234.68.

Insiders Place Their Bets

In related news, insider Michelle Zatlyn sold 35,099 shares of Cloudflare stock in a transaction dated 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 completion of the sale, the insider owned 24,555 shares in the company, valued at approximately $4,892,829.30. This trade represents a 58.84% decrease in their position. The transaction was disclosed in a document filed with the SEC, which can be accessed through 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 value of $8,069,149.90. Following the sale, the chief financial officer owned 137,486 shares of the company’s stock, valued at approximately $26,697,031.48. This represents a 23.21% decrease in their position. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 630,827 shares of company stock valued at $124,436,992. Corporate insiders own 10.89% of the company’s stock.

Institutional Investors Weigh In On Cloudflare

A number of hedge funds and other institutional investors have recently modified their holdings of NET. Norges Bank purchased a new position in shares of Cloudflare during the fourth quarter valued at approximately $718,316,000. Jennison Associates LLC raised its holdings in Cloudflare by 802.6% in the 4th quarter. Jennison Associates LLC now owns 1,863,612 shares of the company’s stock valued at $367,411,000 after acquiring an additional 1,657,144 shares during the last quarter. Groupama Asset Managment acquired a new position in Cloudflare in the 2nd quarter valued at $225,204,000. Vanguard Group Inc. boosted its holdings in shares of Cloudflare by 2.6% during the third quarter. Vanguard Group Inc. now owns 32,317,249 shares of the company’s stock worth $6,934,958,000 after purchasing an additional 821,684 shares during the last quarter. Finally, KBC Group NV boosted its holdings in shares of Cloudflare by 1,388.7% during the second quarter. KBC Group NV now owns 736,153 shares of the company’s stock worth $144,161,000 after purchasing an additional 686,702 shares during the last quarter. 82.68% of the stock is currently owned by hedge funds and other institutional investors.

Cloudflare Stock Performance

The firm has a market cap of $70.08 billion, a PE ratio of -668.35, a P/E/G ratio of 150.60 and a beta of 1.97. The stock has a 50-day moving average price of $191.02 and a 200 day moving average price of $205.03. 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.