Robert W. Baird analyst Shrenik Kothari has maintained their neutral stance on NET stock, giving a Hold rating yesterday.
Shrenik Kothari’s rating is based on the combination of Cloudflare’s robust Q4 performance and tempered outlook for the first half of the year. The company reported a 27% year-over-year revenue growth, driven by large enterprises and advancements in Zero Trust and network services. However, the gross margins faced a decline due to changes in revenue mix and platform investments, which may be a factor in the hold rating.
Despite the success in securing AI-driven use cases and significant wins in SASE, the management has provided a cautious guidance for Q1, indicating a cautious approach towards the sales capacity ramp-up later in the year. Encouraging signs such as improved sales productivity in EMEA and APAC regions and a significant increase in the number of high-paying customers point to strong execution but are balanced by the challenges of maintaining momentum in the face of macroeconomic uncertainties.
In another report released yesterday, J.P. Morgan also maintained a Hold rating on the stock with a $110.00 price target.