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

Cloudflare, Inc. (NYSE:NET) 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.

The company reported $0.28 EPS for the quarter, beating the consensus estimate of $0.27 by $0.01. The company had revenue of $614.51 million during the quarter, compared to analysts’ expectations of $591.67 million. Cloudflare had a negative return on equity of 6.54% and a negative net margin of 5.12%.The firm’s revenue was up 33.6% on a year-over-year basis. During the same quarter in the previous year, the business earned $0.19 EPS.

Key Cloudflare News

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

Analysts Set New Price Targets

A number of brokerages have weighed in on NET. Oppenheimer started coverage on shares of Cloudflare in a report on Monday, November 10th. They issued an “outperform” rating and a $260.00 price target on the stock. BTIG Research lifted their target price on Cloudflare from $199.00 to $243.00 and gave the company a “buy” rating in a report on Wednesday. Wolfe Research reissued a “peer perform” rating on shares of Cloudflare in a research report on Monday, January 26th. Wall Street Zen upgraded Cloudflare from a “hold” rating to a “buy” rating in a report on Saturday, November 8th. Finally, Mizuho reduced their price objective on Cloudflare from $280.00 to $255.00 and set an “outperform” rating on the stock in a research note on Wednesday, January 21st. One research analyst has rated the stock with a Strong Buy rating, nineteen have assigned a Buy rating, eight have given a Hold rating and two have assigned a Sell rating to the company. Based on data from MarketBeat.com, the company has a consensus rating of “Moderate Buy” and an average target price of $234.68.

Insider Activity at Cloudflare

In other Cloudflare news, CFO Thomas J. Seifert sold 10,000 shares of the business’s stock in a transaction on Tuesday, January 20th. The shares were sold at an average price of $178.37, for a total value of $1,783,700.00. Following the transaction, the chief financial officer owned 137,486 shares in the company, valued at $24,523,377.82. The trade was a 6.78% decrease in their position. The sale was disclosed in a filing with the SEC, which is available through the SEC website. 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 of the company’s stock, valued at approximately $4,666,677.75. The trade was a 51.08% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last three months, insiders have sold 630,827 shares of company stock valued at $124,436,992. 10.89% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

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

Cloudflare Stock Up 11.2%

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 firm has a market capitalization of $70.08 billion, a P/E ratio of -668.35, a P/E/G ratio of 150.60 and a beta of 1.97. The stock has a fifty day moving average price of $191.02 and a two-hundred day moving average price of $205.03.

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.