Citi raises Cloudflare stock price target to $180 from $145

On Friday, Citi analysts, led by Fatima Boolani, increased their price target on Cloudflare Inc . (NYSE: NYSE:NET) shares to $180 from the previous $145, while maintaining a Buy rating on the company. The adjustment follows Cloudflare’s strong performance in closing out calendar year 2024. According to InvestingPro data, the stock has delivered impressive returns of nearly 70% over the past year and is currently trading near its 52-week high. InvestingPro analysis indicates the stock is trading above its Fair Value, joining other high-growth tech companies on the most overvalued stocks list.

Cloudflare’s recent achievements include a significant increase in new customer acquisition, with over 16,000 new clients added, which has accelerated past performance. The company also reported robust bookings, despite a deceleration that was attributed to challenging year-over-year comparisons. Notably, Cloudflare has seen accelerating traction with enterprise clients, marking a record number of deals over $1 million.

The analyst noted that these accomplishments reflect an improving sales efficiency, with Cloudflare posting double-digit productivity gains for the fifth consecutive quarter. Importantly, this growth has not come at the cost of profitability, with operating profit margin (OPM) and free cash flow margin (FCFM) continuing to exceed expectations. InvestingPro data reveals impressive gross profit margins of 77.5% and strong liquidity with a current ratio of 3.37. Subscribers can access 14 additional ProTips and a comprehensive Pro Research Report covering Cloudflare’s financial health and growth prospects.

While acknowledging that some bearish investors might focus on the company’s first-quarter earnings and calendar year 2025 estimates, which are below or in line with expectations and could challenge the stock’s high valuation, Boolani expressed confidence in the company’s potential for acceleration in the second half of the year. This outlook is supported by tangible factors confirmed during a management callback. The company has maintained strong revenue growth of 30% year-over-year, and InvestingPro analysts project profitability for the current fiscal year despite current negative earnings per share of -$0.28.

Citi’s reinforced conviction in Cloudflare is based on a sustainable revenue growth forecast of 27-30%, a credible pathway to approximately $5 billion in scaled revenues, a compelling narrative around generative artificial intelligence, and more focused execution. As a result, the firm has reaffirmed its Buy rating and raised the price target, citing higher multiples as the rationale for the adjustment.

In other recent news, Cloudflare Inc. has been the subject of multiple analyst upgrades. Piper Sandler raised its target for Cloudflare to $153, citing potential re-acceleration in the second half of 2025 due to advancements in AI-inferencing, gains in Secure Access Service Edge (SASE), and an uptick in billings. Stifel analysts followed suit, increasing their target to $175, praising the company’s impressive performance in 2024 and the promising early results from its eight-figure Pool-of-Funds agreements.

Meanwhile, Cantor Fitzgerald lifted its price target to $149, acknowledging Cloudflare’s solid sales execution and potential for continued growth. Needham also raised its target to $185, recognizing the company’s successful go-to-market strategy and anticipating a significant uptick in Ramped Rep Capacity in 2025. Finally, Bernstein SocGen Group increased its target to $100, following Cloudflare’s robust Q4 2024 earnings and strong customer base growth.

These recent developments reflect analysts’ confidence in Cloudflare’s financial prospects and strategic moves in the rapidly evolving IT landscape.

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