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Cloudflare Inc NET Stock Quote

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Morningstar‘s Stock Analysis NET

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Cloudflare Fails To Light a Spark as Customers Optimize Spending; Cut FVE to $60; Shares Undervalued

Analyst Note

| Malik Ahmed Khan |

We are lowering our fair value estimate for narrow-moat Cloudflare to $60 from $82 primarily due to trimming of our long-term forecasts, which, in retrospect, were too bullish. Part of our fair value revision is also informed by our belief that, in the near term, Cloudflare’s clients will rein in certain spending as they optimize costs in a challenging environment. Despite the near-term challenges, we reiterate our confidence in Cloudflare’s strong foothold in cybersecurity and the opportunity the firm stands to benefit from in the burgeoning edge computing space. While our fair value estimate is above Cloudflare’s stock price, which dipped more than 10% after earnings, we’d caution investors against investing in Cloudflare unless they’re willing to tolerate the macroeconomy-induced volatility expected in the coming quarters.

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Company Profile NET

Business Description

Cloudflare is a software company based in San Francisco, California, that offers security and web performance offerings by utilizing a distributed, serverless content delivery network, or CDN. The firm’s edge computing platform, Workers, leverages this network by providing clients the ability to deploy, and execute code without maintaining servers.

101 Townsend Street
San Francisco, CA, 94107
T +1 888 993-5273
Industry Software - Infrastructure
Most Recent Earnings Sep 30, 2022
Fiscal Year End Dec 31, 2022
Employees 3,181