Susquehanna Raises Cloudflare Price Target to $260 Amid Analyst Upgrades

Investment analysts at Susquehanna have raised their price target for Cloudflare (NYSE: NET) from $205.00 to $260.00, reflecting a positive outlook on the company’s stock. This adjustment, announced in a report on October 30, 2023, maintains a “neutral” rating for the company. The new target suggests a potential upside of approximately 2.65% from Cloudflare’s previous closing price.

Several other financial institutions have also issued updated ratings for Cloudflare. Piper Sandler recently increased its target from $224.00 to $249.00, while maintaining a “neutral” rating. Conversely, DZ Bank reaffirmed a “sell” rating with a lower price target of $170.00. In contrast, Citizens JMP raised its target to $270.00 and classified the stock as “market outperform.” Mizuho also elevated its target to $280.00, giving it an “outperform” rating. Lastly, Stifel Nicolaus increased its target to $275.00 with a “buy” recommendation.

Analyst sentiment is mixed, with one analyst issuing a Strong Buy rating, sixteen providing a Buy rating, nine assigning a Hold rating, and three recommending a Sell. According to data from MarketBeat.com, Cloudflare currently holds an average rating of “Moderate Buy” and a consensus price target of $228.96.

Cloudflare Earnings Show Positive Trends

In its most recent earnings report, Cloudflare announced earnings per share (EPS) of $0.27 for the quarter, surpassing analysts’ expectations of $0.23 by $0.04. The company’s revenue reached $430.08 million, though this fell short of analyst estimates of $544.87 million. Despite a negative net margin of 5.12% and a negative return on equity of 6.54%, revenue saw a significant increase of 30.7% compared to the same quarter last year.

Looking ahead, Cloudflare has set its Q4 2025 EPS guidance at $0.270 and for the fiscal year 2025 at $0.910. Analysts expect the company to post an EPS of -0.11 for the current year.

Insider Sales and Institutional Activity

Recent insider transactions have raised eyebrows, particularly the sale of 25,641 shares by co-founder Michelle Zatlyn on October 9, 2023. The shares were sold at an average price of $215.38, totaling approximately $5.52 million. Following the sale, Zatlyn owned 14,575 shares, reflecting a 63.76% decrease in her stake. In a similar move, CEO Matthew Prince sold 52,277 shares on October 16, 2023, at an average price of $213.94, amounting to around $11.18 million. After this transaction, Prince retained ownership of only 107 shares.

Over the past quarter, company insiders have sold 631,540 shares valued at approximately $131.56 million. Currently, insiders own 10.89% of Cloudflare’s stock.

Institutional investors are also actively adjusting their positions. Vanguard Group Inc. increased its stake by 2.1%, acquiring an additional 658,656 shares, bringing its total ownership to 31,495,565 shares valued at around $6.17 billion. Geode Capital Management LLC added 270,227 shares, raising its position to 5,536,679 shares valued at approximately $1.08 billion. UBS Asset Management saw a significant increase of 33.5% in its holdings, acquiring 786,063 shares, while American Century Companies Inc. grew its position by 34.5% with 779,819 new shares. Notably, Norges Bank purchased a new stake worth $541.46 million in the second quarter, illustrating heightened institutional interest in Cloudflare.

With approximately 82.68% of Cloudflare’s stock currently held by hedge funds and institutional investors, the company remains a focal point in discussions regarding cloud service providers and cybersecurity solutions. As Cloudflare continues to expand its offerings, the impact on its stock performance and market positioning will be closely monitored by both analysts and investors alike.