Cloudflare stock target raised to $170 at RBC Capital

On Friday, RBC Capital Markets updated its outlook on Cloudflare Inc . (NYSE: NYSE:NET), increasing the price target to $170 from the previous $123, while reiterating an Outperform rating on the company’s shares. The adjustment follows Cloudflare’s robust year-end performance, which exceeded expectations. According to InvestingPro data, the stock has surged 31.43% year-to-date and is currently trading near its 52-week high.

The company’s guidance for the calendar year 2025 anticipates revenue growth of approximately 25%, aligning with market predictions, yet analysts at RBC Capital see potential for further upside. The fourth quarter’s results were particularly strong, marked by a surge in close rates, shorter sales cycles, a rise in large customer acquisitions, and sustained momentum in funding pools. The company maintains impressive gross profit margins of 77.53% and has demonstrated strong revenue growth of 30.04% over the last twelve months.

RBC Capital’s analysts praised Cloudflare’s go-to-market (GTM) strategy, noting it as a key factor in the company’s success. The firm’s increased optimism and higher estimates for Cloudflare are reflected in the newly raised price target. InvestingPro analysis reveals the company maintains a healthy financial position with a current ratio of 3.37 and operates with moderate debt levels. Get access to 16+ additional ProTips and comprehensive analysis with InvestingPro.

Looking ahead, RBC Capital is eager to gain additional insights into Cloudflare’s GTM approach, product developments, and financial details during the upcoming investor day scheduled for March 12, 2025. The firm’s analysts anticipate this event will provide further clarity on Cloudflare’s strategic direction and operational prowess, as the company, now valued at $56.81 billion, continues its growth trajectory.

In other recent news, Cloudflare has garnered attention from multiple analyst firms following its robust performance in closing out the year 2024. Citi analysts, led by Fatima Boolani, raised their price target on Cloudflare to $180, citing sustainable revenue growth forecast of 27-30% and a credible pathway to approximately $5 billion in scaled revenues. Simultaneously, Piper Sandler increased its price target to $153, acknowledging advancements in AI-inferencing and gains in Secure Access Service Edge (SASE) as positive factors.

Stifel analysts also demonstrated confidence in Cloudflare, raising their price target to $175 and praising the company for its impressive performance in executing large deals and enhancing sales productivity. Analyst Adam Borg from Stifel highlighted Cloudflare’s emerging traction in artificial intelligence and a positive shift in macroeconomic commentary.

Cantor Fitzgerald adjusted its price target for Cloudflare to $149, reflecting the firm’s acknowledgment of Cloudflare’s solid sales execution and potential for continued growth. Yi Fu Lee from Cantor Fitzgerald noted a trend of enterprises investing in security, infrastructure modernization, and AI, contributing to a rise in sales close rates and a shortening of sales cycles.

Lastly, Needham analysts raised their price target on Cloudflare’s shares to $185, recognizing a notable increase in customer volume and quality. They anticipate a significant uptick in Ramped Rep Capacity starting in the second quarter of 2025, contributing to the company’s growth trajectory. These recent developments underscore the positive outlook on Cloudflare from various analyst firms.

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