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On Friday, TD Cowen maintained a positive outlook on Cloudflare Inc . (NYSE: NYSE:NET) shares, reiterating a Buy rating with a $150.00 price target. The endorsement follows Cloudflare’s announcement of signing its largest contract to date, valued at over $100 million. The company also reported first-quarter results that exceeded expectations with a 27% year-over-year increase and confirmed its fiscal year 2025 guidance. According to InvestingPro data, Cloudflare’s revenue growth remains robust at 27.79%, with the stock showing an impressive 69.5% return over the past year.
Cloudflare’s recent performance has been bolstered by several key developments. The company’s Workers platform has seen increasing adoption, highlighted by the significant contract win. Additionally, Cloudflare signed its longest term Secure Access Service Edge (SASE) contract thus far. Analysts at TD Cowen have noted early positive outcomes from the company’s enhanced go-to-market strategy, led by recent hires such as Anderson and Desai, as Cloudflare continues to penetrate the Fortune 500 market segment. The company maintains impressive gross profit margins of 76.88% and operates with a healthy current ratio of 3.2, according to InvestingPro data.
The company’s international markets have also shown strong execution. According to TD Cowen, Cloudflare’s focus on expanding its enterprise customer base, coupled with gains in sales productivity and an improved channel reach supported by a robust go-to-market team, sets the stage for potential growth acceleration into fiscal year 2026. With a market capitalization of $46.56 billion and a "GOOD" overall financial health score from InvestingPro, which offers 13 additional valuable insights about Cloudflare’s performance and prospects through its comprehensive Pro Research Report.
TD Cowen’s price target of $150 for Cloudflare is based on a 21 times multiple of the firm’s projected fiscal year 2026 revenue. This valuation reflects confidence in the company’s growth trajectory and the strategic moves it is making to expand its market reach and enhance its product offerings. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its intrinsic value, with analyst targets ranging from $70 to $200.
In other recent news, Cloudflare Inc. reported its first-quarter 2025 earnings, revealing a revenue of $479.1 million, which surpassed the anticipated $469.65 million, marking a 27% year-over-year increase. The company’s earnings per share (EPS) matched analysts’ expectations at $0.16. Cloudflare also maintained a gross margin of 77.1%, exceeding its long-term target. The company’s management reaffirmed its full-year guidance, projecting revenue between $2.090 billion and $2.094 billion for 2025.
Mizuho (NYSE:MFG) Securities raised its price target for Cloudflare to $155, maintaining an Outperform rating, citing the company’s strong revenue growth and robust sales pipeline. Piper Sandler also increased its price target to $151 but maintained a Neutral rating due to concerns about the current stock valuation. Despite some challenges, such as weak net additions in the enterprise segment, Cloudflare’s strategic deals and innovative solutions continue to drive investor confidence.
The company is experiencing significant growth in its AI-related services and customer base, with large customers contributing over $100,000 annually rising by 23% to 3,527. Cloudflare’s recent achievements, including a record-breaking $130 million contract, highlight its competitive edge and strategic importance in the market.
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