NYSE:NET

Stock Analysis Report

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Executive Summary

CloudFlare, Inc. operates a cloud platform that delivers a range of network services to businesses worldwide. More Details


Snowflake Analysis

Mediocre balance sheet with limited growth.


Similar Companies

Share Price & News

How has Cloudflare's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NET is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: NET's weekly volatility (10%) has been stable over the past year.


Market Performance


7 Day Return

6.2%

NET

1.7%

US Software

2.1%

US Market


1 Year Return

256.9%

NET

45.4%

US Software

19.8%

US Market

Return vs Industry: NET exceeded the US Software industry which returned 45.2% over the past year.

Return vs Market: NET exceeded the US Market which returned 19.7% over the past year.


Shareholder returns

NETIndustryMarket
7 Day6.2%1.7%2.1%
30 Day25.0%2.7%8.1%
90 Day76.5%-0.6%6.0%
1 Year256.9%256.9%46.3%45.4%22.5%19.8%
3 Yearn/a138.9%131.3%46.5%36.8%
5 Yearn/a226.2%208.9%96.9%75.3%

Long-Term Price Volatility Vs. Market

How volatile is Cloudflare's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Cloudflare undervalued compared to its fair value and its price relative to the market?

26x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: NET ($69.99) is trading above our estimate of fair value ($39.62)

Significantly Below Fair Value: NET is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: NET is unprofitable, so we can't compare its PE Ratio to the US Software industry average.

PE vs Market: NET is unprofitable, so we can't compare its PE Ratio to the US market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NET's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NET is overvalued based on its PB Ratio (26x) compared to the US Software industry average (8x).


Next Steps

Future Growth

How is Cloudflare forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

17.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NET is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: NET is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: NET is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: NET's revenue (27% per year) is forecast to grow faster than the US market (10.2% per year).

High Growth Revenue: NET's revenue (27% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NET's Return on Equity is forecast to be low in 3 years time (0.1%).


Next Steps

Past Performance

How has Cloudflare performed over the past 5 years?

-37.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NET is currently unprofitable.

Growing Profit Margin: NET is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: NET is unprofitable, and losses have increased over the past 5 years at a rate of 37.9% per year.

Accelerating Growth: Unable to compare NET's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: NET is unprofitable, making it difficult to compare its past year earnings growth to the Software industry (8.9%).


Return on Equity

High ROE: NET has a negative Return on Equity (-13.73%), as it is currently unprofitable.


Next Steps

Financial Health

How is Cloudflare's financial position?


Financial Position Analysis

Short Term Liabilities: NET's short term assets ($1.1B) exceed its short term liabilities ($131.0M).

Long Term Liabilities: NET's short term assets ($1.1B) exceed its long term liabilities ($413.8M).


Debt to Equity History and Analysis

Debt Level: NET's debt to equity ratio (45.3%) is considered high.

Reducing Debt: Insufficient data to determine if NET's debt to equity ratio has reduced over the past 5 years.


Balance Sheet


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: NET has sufficient cash runway for more than 3 years based on its current free cash flow.

Forecast Cash Runway: Insufficient data to determine if NET has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Cloudflare current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate NET's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate NET's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if NET's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if NET's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of NET's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.6yrs

Average management tenure


CEO

Matthew Prince (45 yo)

11.33yrs

Tenure

US$400,000

Compensation

Mr. Matthew Prince co-founded CloudFlare, Inc. in 2009 and has served as its Chief Executive Officer and Chair of Board of Directors since July 2009 and has been its Director since 2009. He also co-founded...


CEO Compensation Analysis

Compensation vs Market: Matthew's total compensation ($USD400.00K) is below average for companies of similar size in the US market ($USD10.79M).

Compensation vs Earnings: Matthew's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Matthew Prince
Co-Founder11.33yrsUS$400.00k11.86%
$ 2.6b
Michelle Zatlyn
Co-Founder11yrsUS$400.00k3.01%
$ 648.4m
Thomas Seifert
Chief Financial Officer3.42yrsUS$650.00k0.17%
$ 35.9m
Douglas Kramer
General Counsel & Secretary4.25yrsUS$3.19m0.13%
$ 27.0m
- John
Chief Technology Officerno datano datano data
Jayson Noland
Head of Investor Relationsno datano datano data
W. Ling
Head of Governance Risk & Complianceno datano datano data
Matthew DuBois
Sales Managerno datano datano data
Aliza Knox
Head of APACno datano datano data
Dane Knecht
Head of Product Strategy8.58yrsno datano data
Isaac Specter
Head of Product Strategy Operationsno datano datano data
Justin Paine
Head of Trust & Safetyno datano datano data

8.6yrs

Average Tenure

49yo

Average Age

Experienced Management: NET's management team is seasoned and experienced (8.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Matthew Prince
Co-Founder11.33yrsUS$400.00k11.86%
$ 2.6b
Michelle Zatlyn
Co-Founder11yrsUS$400.00k3.01%
$ 648.4m
Scott Sandell
Lead Independent Directorno dataUS$10.76k0.11%
$ 22.7m
Carl Ledbetter
Independent Director11yrsUS$14.20k0.72%
$ 154.1m
Stanley Meresman
Independent Director1.92yrsUS$14.95k0%
$ 0
Maria Eitel
Independent Director1.92yrsUS$211.95k0.039%
$ 8.3m
Mark Anderson
Independent Director1.25yrsUS$1.36m0.012%
$ 2.5m
Katrin Suder
Independent Director1.25yrsUS$1.44m0.0080%
$ 1.7m

1.9yrs

Average Tenure

56yo

Average Age

Experienced Board: NET's board of directors are not considered experienced ( 1.9 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: NET insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.4%.


Top Shareholders

Company Information

Cloudflare, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Cloudflare, Inc.
  • Ticker: NET
  • Exchange: NYSE
  • Founded: 2009
  • Industry: Systems Software
  • Sector: Software
  • Market Cap: US$21.508b
  • Shares outstanding: 307.30m
  • Website: https://www.cloudflare.com

Number of Employees


Location

  • Cloudflare, Inc.
  • 101 Townsend Street
  • San Francisco
  • California
  • 94107
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NETNYSE (New York Stock Exchange)YesClass A Common StockUSUSDSep 2019
8CFBST (Boerse-Stuttgart)YesClass A Common StockDEEURSep 2019

Biography

CloudFlare, Inc. operates a cloud platform that delivers a range of network services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combinati...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/11/26 23:15
End of Day Share Price2020/11/25 00:00
Earnings2020/09/30
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.