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CLOUDFLARE INC - CLASS A (NET) Stock Fundamental Analysis

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

195.578  +4.33 (+2.26%)

Fundamental Rating

4

We assign a fundamental rating of 4 out of 10 to NET. NET was compared to 82 industry peers in the IT Services industry. The financial health of NET is average, but there are quite some concerns on its profitability. NET shows excellent growth, but is valued quite expensive already.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

In the past year NET was profitable.
In the past year NET had a positive cash flow from operations.
NET had negative earnings in each of the past 5 years.
NET had a positive operating cash flow in 4 of the past 5 years.
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

With a Return On Assets value of -2.20%, NET is not doing good in the industry: 62.20% of the companies in the same industry are doing better.
Looking at the Return On Equity, with a value of -5.73%, NET is in line with its industry, outperforming 40.24% of the companies in the same 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

Looking at the Gross Margin, with a value of 76.88%, NET belongs to the top of the industry, outperforming 93.90% of the companies in the same industry.
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.
Compared to 5 years ago, NET has more shares outstanding
Compared to 1 year ago, NET has an improved debt to assets ratio.
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

NET has an Altman-Z score of 17.82. This indicates that NET is financially healthy and has little risk of bankruptcy at the moment.
NET has a Altman-Z score of 17.82. This is amongst the best in 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.
With a Debt to FCF ratio value of 7.00, NET perfoms like the industry average, outperforming 45.12% of the companies in the same industry.
NET has a Debt/Equity ratio of 0.90. This is a neutral value indicating NET is somewhat dependend on debt financing.
The Debt to Equity ratio of NET (0.90) is worse than 65.85% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.9
Debt/FCF 7
Altman-Z 17.82
ROIC/WACCN/A
WACC9.3%
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 84.15% of its industry peers.
A Quick Ratio of 3.20 indicates that NET has no problem at all paying its short term obligations.
The Quick ratio of NET (3.20) is better than 84.15% 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

NET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 31.58%, which is quite impressive.
NET shows a strong growth in Revenue. In the last year, the Revenue has grown by 27.79%.
The Revenue has been growing by 42.22% on average over the past years. This is a very strong growth!
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

NET is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 24.82% yearly.
The Revenue is expected to grow by 24.71% on average over the next years. This is a very strong growth
EPS Next Y7.36%
EPS Next 2Y19.16%
EPS Next 3Y25.99%
EPS Next 5Y24.82%
Revenue Next Year26.16%
Revenue Next 2Y26.33%
Revenue Next 3Y26.52%
Revenue Next 5Y24.71%

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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1

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 260.77, which means the current valuation is very expensive for NET.
Based on the Price/Earnings ratio, NET is valued a bit more expensive than the industry average as 60.98% of the companies are valued more cheaply.
NET's Price/Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 27.48.
NET is valuated quite expensively with a Price/Forward Earnings ratio of 183.64.
NET's Price/Forward Earnings is on the same level as the industry average.
NET's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 36.52.
Industry RankSector Rank
PE 260.77
Fwd PE 183.64
NET Price Earnings VS Forward Price EarningsNET Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 50 100 150 200 250

4.2 Price Multiples

Based on the Price/Free Cash Flow ratio, NET is valued a bit more expensive than the industry average as 60.98% of the companies are valued more cheaply.
Industry RankSector Rank
P/FCF 368.07
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 an expensive valuation of the company.
A more expensive valuation may be justified as NET's earnings are expected to grow with 25.99% in the coming years.
PEG (NY)35.44
PEG (5Y)N/A
EPS Next 2Y19.16%
EPS Next 3Y25.99%

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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 (7/18/2025, 2:52:09 PM)

195.578

+4.33 (+2.26%)

Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)05-08 2025-05-08/amc
Earnings (Next)07-31 2025-07-31/amc
Inst Owners86.88%
Inst Owner Change0.01%
Ins Owners0.69%
Ins Owner Change4.98%
Market Cap67.79B
Analysts74.87
Price Target160.92 (-17.72%)
Short Float %3.5%
Short Ratio3.11
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)7.08%
PT rev (3m)7.73%
EPS NQ rev (1m)0.04%
EPS NQ rev (3m)-3.84%
EPS NY rev (1m)0.22%
EPS NY rev (3m)-0.32%
Revenue NQ rev (1m)-0.04%
Revenue NQ rev (3m)0.19%
Revenue NY rev (1m)-0.05%
Revenue NY rev (3m)0.05%
Valuation
Industry RankSector Rank
PE 260.77
Fwd PE 183.64
P/S 38.3
P/FCF 368.07
P/OCF 149.77
P/B 47.54
P/tB 55.52
EV/EBITDA N/A
EPS(TTM)0.75
EY0.38%
EPS(NY)1.07
Fwd EY0.54%
FCF(TTM)0.53
FCFY0.27%
OCF(TTM)1.31
OCFY0.67%
SpS5.11
BVpS4.11
TBVpS3.52
PEG (NY)35.44
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 17.82
F-Score5
WACC9.3%
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 Y7.36%
EPS Next 2Y19.16%
EPS Next 3Y25.99%
EPS Next 5Y24.82%
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 3Y26.52%
Revenue Next 5Y24.71%
EBIT growth 1Y20.39%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year101.57%
EBIT Next 3Y56.5%
EBIT Next 5Y44.87%
FCF growth 1Y377.94%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y131.56%
OCF growth 3Y80.58%
OCF growth 5YN/A