Cloudflare stock price target raised to $265 from $250 at RBC Capital

Investing.com - RBC Capital has raised its price target on Cloudflare Inc. (NYSE:NET) to $265 from $250 while maintaining an Outperform rating on the stock. The new target sits above the current analyst high target of $255, according to InvestingPro data, which also shows NET trading near its 52-week high of $231.13 with a substantial market cap of $77.5 billion.

The firm cited Cloudflare’s strong quarterly results, which featured 31% revenue growth that accelerated from 28% in the previous quarter. RBC highlighted several positive factors including accelerating RPO (remaining performance obligations) and DBNRR (dollar-based net retention rate). This performance aligns with Cloudflare’s impressive 76.14% gross profit margin and 27.32% revenue growth over the last twelve months.

Cloudflare demonstrated momentum in its go-to-market strategy and success with large customers, according to RBC. The company’s Pool of Funds initiative and its Workers platform were also noted as contributing to the strong performance.

RBC described the quarter as "clean/impressive" and indicated it reinforced confidence in both short-term estimates and the long-term opportunity for Cloudflare. The firm raised its target multiple along with its estimates, maintaining that NET remains a "top LT idea." InvestingPro data reveals NET has delivered a remarkable 153.68% return over the past year, though its current price appears significantly above InvestingPro’s Fair Value estimate. Investors seeking deeper insights can access the comprehensive Pro Research Report, available for Cloudflare and 1,400+ other top US stocks.

The investment bank acknowledged the announced departure of CJ Desai, who is leaving for a CEO role elsewhere, calling it "disappointing" but "understandable."

In other recent news, Cloudflare, Inc. reported third-quarter earnings that surpassed analyst expectations, marking a significant development for the company. The company achieved adjusted earnings per share of $0.27, exceeding the analyst consensus of $0.23. Revenue for the quarter reached $562 million, surpassing estimates of $544.56 million and reflecting a 31% increase year-over-year from $430.1 million in the same quarter last year. This revenue growth marks the second consecutive quarter of acceleration. In light of these results, Cloudflare raised its 2025 revenue forecast by more than the amount of the current beat. Additionally, Jefferies maintained its Hold rating on Cloudflare while raising its price target to $250 from $225. These developments suggest a positive outlook from the firm, following Cloudflare’s strong third-quarter performance.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.