Cloudflare (NYSE:NET) Stock Price Down 2.6% – Time to Sell?

Shares of Cloudflare, Inc. (NYSE:NET) fell 2.6% during trading on Wednesday. The company traded as low as $257.83 and last traded at $266.5350. 3,404,464 shares changed hands during trading, a decline of 15% from the average daily volume of 4,025,688 shares. The stock had previously closed at $273.62.

Key Stories Impacting Cloudflare

Here are the key news stories impacting Cloudflare this week:

• Positive Sentiment: JPMorgan upgraded Cloudflare to Overweight from Neutral, setting a $350 price target. The analyst sees the recent pullback as an attractive entry point and believes revenue growth could accelerate. JPMorgan upgrades Cloudflare to Overweight
• Positive Sentiment: A Polen Capital investor-letter article points to accelerating revenue growth and a raised outlook as reasons for an outperforming view of NET, reinforcing the growth case for the shares. Polen Capital investor-letter coverage
• Neutral Sentiment: Cloudflare is scheduled to report Q3 results on November 5. The release may provide a near-term catalyst, with investors watching for evidence that growth and the outlook can support the stock’s valuation. Cloudflare Q3 earnings preview
• Negative Sentiment: Jefferies lowered its price target to $320 from $350, adding to analyst caution. Separate coverage cites Cloudflare’s rich valuation, insider selling, and options-market positioning that points to downside risk after earnings. Jefferies cuts Cloudflare price target Insider selling and options-market outlook

Analysts Set New Price Targets

NET has been the subject of several recent research reports. Citigroup reaffirmed a “market outperform” rating on shares of Cloudflare in a research note on Monday, August 31st. Craig Hallum upgraded shares of Cloudflare to a “buy” rating in a research report on Tuesday. Cantor Fitzgerald reissued a “neutral” rating and set a $340.00 target price on shares of Cloudflare in a report on Monday, October 5th. Wedbush began coverage on shares of Cloudflare in a research report on Tuesday. They issued an “outperform” rating for the company. Finally, Needham & Company LLC raised their price target on shares of Cloudflare from $280.00 to $380.00 and gave the company a “buy” rating in a research note on Friday, August 7th. Twenty-four analysts have rated the stock with a Buy rating, seven have issued a Hold rating and six have issued a Sell rating to the stock. According to data from MarketBeat.com, the stock currently has an average rating of “Hold” and an average price target of $333.21.

Cloudflare Stock Down 2.6%

The stock has a 50-day moving average price of $320.06 and a 200-day moving average price of $248.60. The company has a debt-to-equity ratio of 1.22, a current ratio of 1.82 and a quick ratio of 1.82. The company has a market capitalization of $94.21 billion, a P/E ratio of -459.54, a P/E/G ratio of 210.90 and a beta of 1.37.

Cloudflare (NYSE:NET) last announced its earnings results on Thursday, August 6th. The company reported $0.29 EPS for the quarter, beating the consensus estimate of $0.27 by $0.02. The business had revenue of $696.06 million for the quarter, compared to analysts’ expectations of $664.66 million. Cloudflare had a negative return on equity of 3.88% and a negative net margin of 8.21%. The firm’s revenue was up 35.9% on a year-over-year basis. During the same period in the prior year, the business posted $0.21 earnings per share. On average, research analysts predict that Cloudflare, Inc. will post 0.03 EPS for the current fiscal year.

Insider Transactions at Cloudflare

In other news, insider Michelle Zatlyn sold 33,003 shares of the business’s stock in a transaction that occurred on Tuesday, September 8th. The shares were sold at an average price of $277.43, for a total value of $9,156,022.29. Following the transaction, the insider owned 69,775 shares in the company, valued at approximately $19,357,678.25. The trade was a 32.11% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CFO Thomas Seifert sold 12,500 shares of the company’s stock in a transaction on Monday, October 19th. The shares were sold at an average price of $299.59, for a total transaction of $3,744,875.00. Following the completion of the sale, the chief financial officer directly owned 104,958 shares in the company, valued at approximately $31,444,367.22. This represents a 10.64% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. In the last 90 days, insiders have sold 264,057 shares of company stock worth $80,926,805. Company insiders own 10.66% of the company’s stock.

Institutional Trading of Cloudflare

A number of large investors have recently bought and sold shares of NET. AEGON ASSET MANAGEMENT UK Plc boosted its position in shares of Cloudflare by 23.0% during the 3rd quarter. AEGON ASSET MANAGEMENT UK Plc now owns 237,582 shares of the company’s stock valued at $82,507,000 after purchasing an additional 44,354 shares in the last quarter. Gryphon Financial Partners LLC bought a new stake in Cloudflare in the third quarter worth approximately $249,000. Kestra Investment Management LLC increased its holdings in Cloudflare by 34.2% in the third quarter. Kestra Investment Management LLC now owns 2,216 shares of the company’s stock worth $769,000 after purchasing an additional 565 shares in the last quarter. AlphaCore Capital LLC lifted its stake in Cloudflare by 79.1% in the third quarter. AlphaCore Capital LLC now owns 3,601 shares of the company’s stock valued at $1,251,000 after buying an additional 1,590 shares during the period. Finally, Fulcrum Asset Management LLP acquired a new position in Cloudflare in the third quarter valued at approximately $2,394,000. 82.68% of the stock is currently owned by institutional investors and hedge funds.

About Cloudflare

Cloudflare, Inc (NYSE: NET) provides cloud connectivity, security and performance services for websites, applications, corporate networks and other internet-connected resources. Its global network is designed to help organizations improve the reliability, speed and security of digital services while reducing the complexity of managing internet infrastructure.

The company’s offerings include content delivery and authoritative domain name system services, distributed denial-of-service protection, web application and application programming interface security, bot management, and network security tools.