Cloudflare (NYSE:NET) Downgraded to “Strong Sell” Rating by Zacks Research

Cloudflare (NYSE:NET) was downgraded by stock analysts at Zacks Research from a “hold” rating to a “strong sell” rating in a research report issued to clients and investors on Thursday,Zacks.com reports.

A number of other research analysts have also weighed in on NET. DZ Bank raised shares of Cloudflare from a “hold” rating to a “buy” rating and set a $215.00 target price on the stock in a research note on Friday. Truist Financial set a $225.00 price objective on Cloudflare in a research report on Tuesday, January 20th. Wall Street Zen raised Cloudflare from a “hold” rating to a “buy” rating in a research note on Saturday, November 8th. Needham & Company LLC cut their target price on Cloudflare from $285.00 to $250.00 and set a “buy” rating for the company in a research note on Wednesday. Finally, Barclays lifted their price target on Cloudflare from $235.00 to $250.00 and gave the stock an “overweight” rating in a report on Wednesday. One investment analyst has rated the stock with a Strong Buy rating, twenty have assigned a Buy rating, seven have issued a Hold rating and three have assigned a Sell rating to the stock. According to MarketBeat, the company currently has an average rating of “Moderate Buy” and a consensus price target of $232.11.

Cloudflare Trading Up 5.8%

Shares of NET stock opened at $196.00 on Thursday. Cloudflare has a fifty-two week low of $89.42 and a fifty-two week high of $260.00. The company has a debt-to-equity ratio of 1.46, a quick ratio of 2.04 and a current ratio of 2.04. The stock’s fifty day moving average is $190.27 and its two-hundred day moving average is $204.76. The firm has a market capitalization of $68.66 billion, a P/E ratio of -675.84, a PEG ratio of 328.65 and a beta of 1.97.

Cloudflare (NYSE:NET) last issued its earnings results on Tuesday, February 10th. The company reported $0.28 EPS for the quarter, beating analysts’ consensus estimates of $0.27 by $0.01. The business had revenue of $614.51 million during the quarter, compared to analysts’ expectations of $591.67 million. Cloudflare had a negative net margin of 4.72% and a negative return on equity of 7.40%. The company’s quarterly revenue was up 33.6% compared to the same quarter last year. During the same period in the prior year, the business earned $0.19 earnings per share. Research analysts expect that Cloudflare will post -0.11 earnings per share for the current fiscal year.

Insider Activity

In related news, Director Carl Ledbetter sold 15,000 shares of the business’s stock in a transaction dated Tuesday, January 27th. The shares were sold at an average price of $211.16, for a total value of $3,167,400.00. Following the sale, the director directly owned 953,073 shares in the company, valued at approximately $201,250,894.68. The trade was a 1.55% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through this link. Also, insider Michelle Zatlyn sold 25,641 shares of the company’s stock in a transaction dated Thursday, January 15th. The shares were sold at an average price of $190.05, for a total transaction of $4,873,072.05. Following the completion of the transaction, the insider directly owned 24,555 shares in the company, valued at $4,666,677.75. The trade was a 51.08% decrease in their position. The SEC filing for this sale provides additional information. In the last ninety days, insiders sold 633,347 shares of company stock worth $124,873,834. 10.89% of the stock is currently owned by corporate insiders.

Institutional Trading of Cloudflare

Institutional investors have recently added to or reduced their stakes in the stock. Rakuten Investment Management Inc. acquired a new stake in shares of Cloudflare in the third quarter valued at $138,660,000. Allianz Asset Management GmbH increased its holdings in Cloudflare by 322.4% during the 3rd quarter. Allianz Asset Management GmbH now owns 65,182 shares of the company’s stock worth $13,987,000 after purchasing an additional 49,749 shares during the period. National Pension Service raised its position in Cloudflare by 1.0% in the 3rd quarter. National Pension Service now owns 618,662 shares of the company’s stock valued at $132,759,000 after purchasing an additional 5,939 shares in the last quarter. Westfield Capital Management Co. LP acquired a new stake in Cloudflare in the 2nd quarter valued at about $87,868,000. Finally, Swedbank AB boosted its stake in shares of Cloudflare by 27.7% in the 3rd quarter. Swedbank AB now owns 43,878 shares of the company’s stock valued at $9,416,000 after buying an additional 9,527 shares during the period. Institutional investors and hedge funds own 82.68% of the company’s stock.

Key Stories Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: Q4 beat — Cloudflare reported revenue of ~$614.5M (+33.6% YoY) and EPS of $0.28, with management highlighting record deal activity, rising RPO/cRPO and improving free cash flow. MSN: Q4 growth
• Positive Sentiment: Revenue guidance topped estimates — management raised FY‑2026 revenue outlook (management cited a figure near $2.795B), signaling confidence in sustained demand and driving the rally. Investing.com: Guidance beats
• Positive Sentiment: AI tailwind — multiple reports and management commentary point to rising “agentic” traffic (e.g., Moltbot) that boosts security, networking and edge services, creating a durable demand cycle. Yahoo: AI deals
• Positive Sentiment: Analyst upgrades and higher targets — several firms upgraded or raised targets (examples include Robert W. Baird to outperform/$260 and DZ Bank to buy/$215), adding conviction to the upside thesis. Finviz: Analyst moves
• Positive Sentiment: Elevated options activity — unusually large call buying (13,474 contracts) suggests short‑term bullish/speculative positioning around the stock.
• Neutral Sentiment: Mixed analyst notes — some firms reaffirm neutral/hold stances (Cantor Fitzgerald) or trimmed PTs modestly while keeping buy ratings, reflecting differing views on valuation vs. growth. Zacks: Analyst roundup
• Neutral Sentiment: Valuation questions persist — coverage pieces and valuation checks note Cloudflare’s rich multiples given ongoing margin/headwind dynamics, so upside depends on continued revenue leverage. Yahoo: Valuation check
• Negative Sentiment: Insider sale disclosed — director John Graham‑Cumming sold 2,520 shares; small relative to his holdings but noted by the market. SEC: Form 4
• Negative Sentiment: Institutional profit‑taking — at least one fund materially trimmed its stake in recent filings, evidence of some near‑term selling pressure amid the rally. DefenseWorld: Institutional trimming
• Negative Sentiment: Some target cuts — a few analysts reduced price targets (e.g., Scotiabank), underscoring uneven short‑term sentiment despite the beat. TickerReport: PT cuts

About Cloudflare

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.