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Investing.com - UBS raised its price target on Cloudflare Inc. (NYSE:NET) to $245 from $240 while maintaining a Neutral rating following the company’s third-quarter results. The stock currently trades at $222.50, just 3.7% below its 52-week high of $231.13, after delivering an impressive 153.68% return over the past year.
Cloudflare delivered what UBS described as a "standout" quarter, with revenue growth of 31% exceeding expectations and beating guidance by 3%. The company also guided to 28% growth for the fourth quarter, surpassing the previously implied 26% growth rate. This performance aligns with Cloudflare’s impressive 76.14% gross profit margins, according to InvestingPro data.
The cloud services provider indicated it expects to reach a $3 billion run-rate by the fourth quarter of 2026, representing approximately 27% year-over-year growth. UBS noted this performance was strong even when considering the company’s 30x enterprise value to sales multiple.
UBS observed that Cloudflare’s current remaining performance obligations (cRPO) bookings decelerated to 25% year-over-year, which, while still impressive, could suggest slowing momentum from Pool of Fund enterprise bookings.
With Cloudflare stock now trading at 26x enterprise value to sales on calendar year 2027 estimates, UBS sees a "more balanced risk-reward" profile, supporting its decision to maintain a Neutral rating despite the price target increase.
In other recent news, Cloudflare Inc . reported impressive third-quarter results, with revenue reaching $562 million, exceeding analyst estimates of $544.56 million and marking a 31% year-over-year increase. The company’s adjusted earnings per share also surpassed expectations, coming in at $0.27 compared to the consensus of $0.23. Following these results, Cloudflare raised its 2025 revenue forecast, reflecting confidence in its future performance. Several analyst firms have responded positively to these developments. Citizens raised its price target for Cloudflare to $270, maintaining a Market Outperform rating, while Mizuho increased its target to $280, also keeping an Outperform rating. RBC Capital raised its price target to $265, citing strong quarterly results and accelerating performance metrics. Meanwhile, Jefferies adjusted its price target to $250 and maintained a Hold rating, noting the company’s significant revenue beat. These recent developments highlight a positive outlook among analysts for Cloudflare’s growth trajectory.
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