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CLOUDFLARE INC - CLASS A (NET) Stock Fundamental Analysis

NYSE:NET - New York Stock Exchange, Inc. - US18915M1071 - Common Stock - Currency: USD

158.21  +1.69 (+1.08%)

After market: 158 -0.21 (-0.13%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to NET. NET was compared to 82 industry peers in the IT Services industry. While NET seems to be doing ok healthwise, there are quite some concerns on its profitability. NET is valued quite expensively, but it does show have an excellent growth rating.


Dividend Valuation Growth Profitability Health

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3

1. Profitability

1.1 Basic Checks

NET had positive earnings in the past year.
In the past year NET had a positive cash flow from operations.
In the past 5 years NET always reported negative net income.
Of the past 5 years NET 4 years had a positive operating cash flow.
NET Yearly Net Income VS EBIT VS OCF VS FCFNET Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 200M -200M

1.2 Ratios

NET has a Return On Assets of -2.20%. This is comparable to the rest of the industry: NET outperforms 40.24% of its industry peers.
NET has a Return On Equity (-5.73%) which is comparable to the rest of the industry.
Industry RankSector Rank
ROA -2.2%
ROE -5.73%
ROIC N/A
ROA(3y)-5.51%
ROA(5y)-7.23%
ROE(3y)-20.88%
ROE(5y)-21.83%
ROIC(3y)N/A
ROIC(5y)N/A
NET Yearly ROA, ROE, ROICNET Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 0 0 0 0

1.3 Margins

NET has a Gross Margin of 76.88%. This is amongst the best in the industry. NET outperforms 93.90% of its industry peers.
NET's Gross Margin has been stable in the last couple of years.
The Profit Margin and Operating Margin are not available for NET so they could not be analyzed.
Industry RankSector Rank
OM N/A
PM (TTM) N/A
GM 76.88%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.12%
GM growth 5Y-0.15%
NET Yearly Profit, Operating, Gross MarginsNET Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 20 -20 40 -40 60

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6

2. Health

2.1 Basic Checks

NET does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for NET has been increased compared to 1 year ago.
The number of shares outstanding for NET has been increased compared to 5 years ago.
The debt/assets ratio for NET has been reduced compared to a year ago.
NET Yearly Shares OutstandingNET Yearly Shares OutstandingYearly Shares Outstanding 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M
NET Yearly Total Debt VS Total AssetsNET Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B

2.2 Solvency

An Altman-Z score of 14.82 indicates that NET is not in any danger for bankruptcy at the moment.
NET's Altman-Z score of 14.82 is amongst the best of the industry. NET outperforms 96.34% of its industry peers.
NET has a debt to FCF ratio of 7.00. This is a slightly negative value and a sign of low solvency as NET would need 7.00 years to pay back of all of its debts.
NET has a Debt to FCF ratio (7.00) which is comparable to the rest of the industry.
NET has a Debt/Equity ratio of 0.90. This is a neutral value indicating NET is somewhat dependend on debt financing.
NET has a worse Debt to Equity ratio (0.90) than 64.63% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.9
Debt/FCF 7
Altman-Z 14.82
ROIC/WACCN/A
WACC9.5%
NET Yearly LT Debt VS Equity VS FCFNET Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 500M 1B

2.3 Liquidity

A Current Ratio of 3.20 indicates that NET has no problem at all paying its short term obligations.
The Current ratio of NET (3.20) is better than 86.59% of its industry peers.
NET has a Quick Ratio of 3.20. This indicates that NET is financially healthy and has no problem in meeting its short term obligations.
NET has a Quick ratio of 3.20. This is amongst the best in the industry. NET outperforms 86.59% of its industry peers.
Industry RankSector Rank
Current Ratio 3.2
Quick Ratio 3.2
NET Yearly Current Assets VS Current LiabilitesNET Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2017 2018 2019 2020 2021 2022 2023 2024 500M 1B 1.5B 2B

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8

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 31.58% over the past year.
NET shows a strong growth in Revenue. In the last year, the Revenue has grown by 27.79%.
NET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 42.22% yearly.
EPS 1Y (TTM)31.58%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%0%
Revenue 1Y (TTM)27.79%
Revenue growth 3Y36.51%
Revenue growth 5Y42.22%
Sales Q2Q%26.54%

3.2 Future

Based on estimates for the next years, NET will show a very strong growth in Earnings Per Share. The EPS will grow by 41.48% on average per year.
Based on estimates for the next years, NET will show a very strong growth in Revenue. The Revenue will grow by 24.78% on average per year.
EPS Next Y7.12%
EPS Next 2Y19.5%
EPS Next 3Y26.5%
EPS Next 5Y41.48%
Revenue Next Year26.16%
Revenue Next 2Y26.33%
Revenue Next 3Y26.57%
Revenue Next 5Y24.78%

3.3 Evolution

Although the future Revenue growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
NET Yearly Revenue VS EstimatesNET Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2B 4B 6B 8B
NET Yearly EPS VS EstimatesNET Yearly EPS VS EstimatesYearly EPS VS Estimates 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 0 2 4 6 8

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2

4. Valuation

4.1 Price/Earnings Ratio

A Price/Earnings ratio of 210.95 indicates a quite expensive valuation of NET.
NET's Price/Earnings ratio is in line with the industry average.
NET's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 25.91.
A Price/Forward Earnings ratio of 147.72 indicates a quite expensive valuation of NET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NET is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of NET to the average of the S&P500 Index (21.85), we can say NET is valued expensively.
Industry RankSector Rank
PE 210.95
Fwd PE 147.72
NET Price Earnings VS Forward Price EarningsNET Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 50 100 150 200

4.2 Price Multiples

NET's Price/Free Cash Flow ratio is in line with the industry average.
Industry RankSector Rank
P/FCF 297.69
EV/EBITDA N/A
NET Per share dataNET EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 1 2 3 4 5

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NET does not grow enough to justify the current Price/Earnings ratio.
NET's earnings are expected to grow with 26.50% in the coming years. This may justify a more expensive valuation.
PEG (NY)29.63
PEG (5Y)N/A
EPS Next 2Y19.5%
EPS Next 3Y26.5%

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0

5. Dividend

5.1 Amount

NET does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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CLOUDFLARE INC - CLASS A

NYSE:NET (5/22/2025, 8:04:00 PM)

After market: 158 -0.21 (-0.13%)

158.21

+1.69 (+1.08%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)05-08 2025-05-08/amc
Earnings (Next)07-30 2025-07-30/amc
Inst Owners87.65%
Inst Owner Change-1.69%
Ins Owners0.77%
Ins Owner Change5.23%
Market Cap54.83B
Analysts73.68
Price Target145.32 (-8.15%)
Short Float %1.97%
Short Ratio1.56
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.12%
Min EPS beat(2)-4.26%
Max EPS beat(2)4.03%
EPS beat(4)3
Avg EPS beat(4)11.58%
Min EPS beat(4)-4.26%
Max EPS beat(4)37.83%
EPS beat(8)7
Avg EPS beat(8)23.44%
EPS beat(12)11
Avg EPS beat(12)334.45%
EPS beat(16)15
Avg EPS beat(16)309.75%
Revenue beat(2)2
Avg Revenue beat(2)0.9%
Min Revenue beat(2)0.73%
Max Revenue beat(2)1.08%
Revenue beat(4)4
Avg Revenue beat(4)0.7%
Min Revenue beat(4)0.4%
Max Revenue beat(4)1.08%
Revenue beat(8)7
Avg Revenue beat(8)0.67%
Revenue beat(12)9
Avg Revenue beat(12)0.49%
Revenue beat(16)13
Avg Revenue beat(16)1.13%
PT rev (1m)-2.72%
PT rev (3m)27.79%
EPS NQ rev (1m)-2.47%
EPS NQ rev (3m)-3.75%
EPS NY rev (1m)-1.01%
EPS NY rev (3m)-1.67%
Revenue NQ rev (1m)0.14%
Revenue NQ rev (3m)0.08%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.28%
Valuation
Industry RankSector Rank
PE 210.95
Fwd PE 147.72
P/S 30.97
P/FCF 297.69
P/OCF 121.13
P/B 38.45
P/tB 44.91
EV/EBITDA N/A
EPS(TTM)0.75
EY0.47%
EPS(NY)1.07
Fwd EY0.68%
FCF(TTM)0.53
FCFY0.34%
OCF(TTM)1.31
OCFY0.83%
SpS5.11
BVpS4.11
TBVpS3.52
PEG (NY)29.63
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -2.2%
ROE -5.73%
ROCE N/A
ROIC N/A
ROICexc N/A
ROICexgc N/A
OM N/A
PM (TTM) N/A
GM 76.88%
FCFM 10.4%
ROA(3y)-5.51%
ROA(5y)-7.23%
ROE(3y)-20.88%
ROE(5y)-21.83%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.12%
GM growth 5Y-0.15%
F-Score5
Asset Turnover0.48
Health
Industry RankSector Rank
Debt/Equity 0.9
Debt/FCF 7
Debt/EBITDA N/A
Cap/Depr 192.01%
Cap/Sales 15.17%
Interest Coverage N/A
Cash Conversion N/A
Profit Quality N/A
Current Ratio 3.2
Quick Ratio 3.2
Altman-Z 14.82
F-Score5
WACC9.5%
ROIC/WACCN/A
Cap/Depr(3y)142.08%
Cap/Depr(5y)147.96%
Cap/Sales(3y)13.32%
Cap/Sales(5y)14.75%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)31.58%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%0%
EPS Next Y7.12%
EPS Next 2Y19.5%
EPS Next 3Y26.5%
EPS Next 5Y41.48%
Revenue 1Y (TTM)27.79%
Revenue growth 3Y36.51%
Revenue growth 5Y42.22%
Sales Q2Q%26.54%
Revenue Next Year26.16%
Revenue Next 2Y26.33%
Revenue Next 3Y26.57%
Revenue Next 5Y24.78%
EBIT growth 1Y20.39%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year102.51%
EBIT Next 3Y56.7%
EBIT Next 5Y50.5%
FCF growth 1Y377.94%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y131.56%
OCF growth 3Y80.58%
OCF growth 5YN/A