Cloudflare stock price target raised to $135 at JMP Securities

On Tuesday, JMP Securities increased the price target for Cloudflare Inc . (NYSE: NYSE:NET) shares, lifting it to $135 from the previous target of $120. With the stock currently trading at $126.47 and near its 52-week high of $130.65, the firm continues to endorse a Market Outperform rating for the company. The stock has demonstrated strong momentum, delivering a 57.73% return over the past year.

JMP Securities' decision to boost the price target is based on Cloudflare's current trading at a calendar year 2026 enterprise value to revenue (EV/revenue) multiple of 16.9x. The new price target of $135 suggests an EV/revenue multiple of 18.1x for the year 2026, which is a step up from the earlier assumption of 16.0x. This target is notably higher than the average multiple of 7.4x observed within Cloudflare's peer group. While currently unprofitable, InvestingPro analysis indicates the company is expected to achieve profitability this year, supported by impressive gross profit margins of 77.53%.

The analysts at JMP Securities justify this premium valuation by pointing to Cloudflare's strong top-line growth, its access to a large total addressable market (TAM), and the company's strategic goal to become the essential infrastructure connecting organizations' cloud environments. The new price target also indicates a 7% premium over the current price of Cloudflare's stock.

Cloudflare's performance and future prospects have been recognized by JMP Securities as a basis for the positive outlook and the increased price target. The firm's analysts have expressed confidence in Cloudflare's potential and its positioning within the market.

In other recent news, Cloudflare Inc. has seen a flurry of analyst activity. Citi analysts recently upgraded Cloudflare's stock rating from Neutral to Buy, citing a positive outlook on the company's future earnings potential and expectations of revenue growth. Goldman Sachs also elevated the company's stock rating from Sell to Buy, highlighting a reorganization of its sales force and new leadership hires as key factors. However, Citi maintained its Neutral rating, noting the company's Pool-of-Funds deals are encouraging significant purchases and improving visibility among large enterprises.

RBC Capital Markets and Baird maintained their Outperform ratings on Cloudflare, highlighting the company's position as a fast-growing cybersecurity vendor. Stifel upgraded Cloudflare from Hold to Buy, reflecting confidence in the company's potential for sustained top-line growth and improving profitability.

Cloudflare reported a 28% year-over-year increase in Q3 revenue, reaching $430.1 million, and a significant rise in its customer base, now standing at 3,265. The company anticipates continued growth in sales capacity and productivity, with Q4 2023 revenue projections indicating a 25% year-over-year increase. These are recent developments that investors should pay attention to.

Analysts from various firms have also increased the price target for Cloudflare shares, including Citi, RBC Capital Markets, Goldman Sachs, Baird, and Stifel. These upgrades reflect the analysts' increased confidence in Cloudflare's growth trajectory and market positioning.

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