BTIG analyst Gray Powell has maintained their neutral stance on NET stock, giving a Hold rating today.
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Gray Powell has given his Hold rating due to a combination of factors surrounding Cloudflare’s financial performance and market valuation. While the company delivered strong fourth-quarter results for 2024, with revenue and operating income surpassing estimates, its future outlook presents challenges. Cloudflare’s projected revenue growth for 2025 aligns with expectations, but it faces pressure to accelerate net new revenue additions to meet guidance, which could be ambitious.
Despite notable progress in sales strategies and increased large deal activity, the valuation of Cloudflare’s stock poses concerns. The shares are trading at a high multiple of 21.0 times the expected 2026 enterprise value to sales, which is significantly above its high-growth peers. This elevated valuation suggests a less favorable risk-reward profile, justifying the Hold rating despite the company’s operational strengths.
According to TipRanks, Powell is a 5-star analyst with an average return of 11.0% and a 57.10% success rate. Powell covers the Technology sector, focusing on stocks such as Palo Alto Networks, Zscaler, and Fortinet.
In another report released today, Bernstein also maintained a Hold rating on the stock with a $100.00 price target.