Validea Guru Analysis of CLOUDFLARE INC (NET) by Wesley Gray

CLOUDFLARE INC (NET) rates highest using the Quantitative Momentum Investor model based on Wesley Gray's strategy. The stock meets the strategy's tests, including strong and consistent intermediate-term relative performance, return consistency, and neutrality towards seasonal trends. Validea, an investment research service, follows the published strategies of investment legends, including Warren Buffett, Benjamin Graham, and Peter Lynch.

Cloudflare Inc. (NYSE:NET) has continued to demonstrate robust financial performance, with the stock reaching a 52-week high of $218.25 and experiencing an impressive 182.22% increase in its stock value over the past year [2]. The company's latest earnings report for the second quarter of 2025 highlighted its strong growth trajectory, with revenue reaching $512.3 million, up 27.76% from the previous quarter [1]. This performance was ahead of consensus estimates by $10.73 million, and earnings per share (EPS) of $0.21 exceeded expectations by $0.03.

Analysts have responded positively to Cloudflare's performance. Mizuho analyst Gregg Moskowitz raised the firm's price target to $240, maintaining an Outperform rating [1]. Similarly, Citizens JMP increased its price target to $250, also maintaining a Market Outperform rating [2]. These upgrades reflect the company's strong fundamentals and its potential for continued growth.

Cloudflare's success can be attributed to its diverse range of internet security, performance, and reliability services, as well as its active development of quantum-safe cryptography solutions. The company's gross profit margins of 76.14% and a healthy current ratio of 5.14 further underscore its financial health [2].

Moreover, Cloudflare's performance aligns with the Quantitative Momentum Investor model, as it meets the strategy's tests for strong and consistent intermediate-term relative performance, return consistency, and neutrality towards seasonal trends [Writing Topic]. Validea, an investment research service, follows the published strategies of investment legends, including Warren Buffett, Benjamin Graham, and Peter Lynch, and has recognized Cloudflare's adherence to these criteria.

As investors continue to monitor Cloudflare's progress, the company's resilience and potential for continued success in the competitive technology landscape remain evident. While the stock appears overvalued at current levels according to InvestingPro's Fair Value analysis, its strong fundamentals and analyst upgrades provide a compelling case for its long-term potential [2].

References:

[1] https://finance.yahoo.com/news/mizuho-raised-firm-pt-cloudflare-021927428.html

[2] https://za.investing.com/news/company-news/cloudflare-stock-hits-52week-high-at-21825-usd-93CH-3826427