CLOUDFLARE INC - CLASS A (NET)
US18915M1071 - Common Stock
Taking everything into account, NET scores 4 out of 10 in our fundamental rating. NET was compared to 86 industry peers in the IT Services industry. NET scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. NET shows excellent growth, but is valued quite expensive already.
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.
In multiple years NET reported negative operating cash flow during the last 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of -6.67%, NET is doing worse than 60.71% of the companies in the same industry.
The Return On Equity of NET (-24.11%) is worse than 61.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.67% | ||
| ROE | -24.11% | ||
| ROIC | N/A |
ROA(3y)-8.37%
ROA(5y)-9.3%
ROE(3y)-29%
ROE(5y)-23.24%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With an excellent Gross Margin value of 76.32%, NET belongs to the best of the industry, outperforming 94.05% of the companies in the same industry.
NET's Gross Margin has been stable in the last couple of years.
NET does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 76.32% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.1%
GM growth 5Y-0.27%
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
NET has a better debt/assets ratio than last year.
2.2 Solvency
NET has an Altman-Z score of 9.14. This indicates that NET is financially healthy and has little risk of bankruptcy at the moment.
With an excellent Altman-Z score value of 9.14, NET belongs to the best of the industry, outperforming 94.05% of the companies in the same industry.
The Debt to FCF ratio of NET is 10.74, which is on the high side as it means it would take NET, 10.74 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of NET (10.74) is comparable to the rest of the industry.
A Debt/Equity ratio of 1.68 is on the high side and indicates that NET has dependencies on debt financing.
NET has a worse Debt to Equity ratio (1.68) than 72.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | 10.74 | ||
| Altman-Z | 9.14 |
ROIC/WACCN/A
WACC10.66%
2.3 Liquidity
A Current Ratio of 3.50 indicates that NET has no problem at all paying its short term obligations.
NET has a better Current ratio (3.50) than 85.71% of its industry peers.
NET has a Quick Ratio of 3.50. This indicates that NET is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 3.50, NET belongs to the top of the industry, outperforming 85.71% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.5 | ||
| Quick Ratio | 3.5 |
3. Growth
3.1 Past
NET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 274.05%, which is quite impressive.
The Revenue has grown by 32.96% in the past year. This is a very strong growth!
NET shows a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 46.42% yearly.
EPS 1Y (TTM)274.05%
EPS 3YN/A
EPS 5YN/A
EPS growth Q2Q150%
Revenue 1Y (TTM)32.96%
Revenue growth 3Y44.35%
Revenue growth 5Y46.42%
Revenue growth Q2Q31.95%
3.2 Future
NET is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 42.19% yearly.
NET is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 30.53% yearly.
EPS Next Y24.3%
EPS Next 2Y26.81%
EPS Next 3Y32.07%
EPS Next 5Y42.19%
Revenue Next Year28.89%
Revenue Next 2Y28.34%
Revenue Next 3Y27.76%
Revenue Next 5Y30.53%
3.3 Evolution
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 171.63, NET can be considered very expensive at the moment.
Compared to the rest of the industry, the Price/Earnings ratio of NET indicates a slightly more expensive valuation: NET is more expensive than 60.71% of the companies listed in the same industry.
NET is valuated expensively when we compare the Price/Earnings ratio to 24.76, which is the current average of the S&P500 Index.
NET is valuated quite expensively with a Price/Forward Earnings ratio of 138.08.
60.71% of the companies in the same industry are cheaper than NET, based on the Price/Forward Earnings ratio.
NET's Price/Forward Earnings ratio indicates a rather expensive valuation when compared to the S&P500 average which is at 21.26.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 171.63 | ||
| Fwd PE | 138.08 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, NET is valued a bit more expensive than the industry average as 61.90% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 237.7 | ||
| EV/EBITDA | N/A |
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 32.07% in the coming years. This may justify a more expensive valuation.
PEG (NY)7.06
PEG (5Y)N/A
EPS Next 2Y26.81%
EPS Next 3Y32.07%
5. Dividend
5.1 Amount
NET does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CLOUDFLARE INC - CLASS A
NYSE:NET (4/19/2024, 7:06:20 PM)
After market: 83.5 -0.6 (-0.71%)84.1
-2.61 (-3.01%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap28.40B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 171.63 | ||
| Fwd PE | 138.08 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)7.06
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -6.67% | ||
| ROE | -24.11% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 76.32% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.68 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 3.5 | ||
| Quick Ratio | 3.5 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)274.05%
EPS 3YN/A
EPS 5Y
EPS growth Q2Q
EPS Next Y24.3%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)32.96%
Revenue growth 3Y44.35%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y