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Investing.com - Jefferies maintained its Hold rating on Cloudflare Inc (NYSE:NET) while raising its price target to $250 from $225 as analyst coverage transfers to Joseph Gallo. The new target sits near the high end of the analyst range, with targets spanning from $90 to $255, according to InvestingPro data.
The firm noted Cloudflare’s third-quarter performance exceeded expectations with revenue beating guidance midpoint by 3.3%, marking the company’s highest beat in nearly four years. Following these results, Cloudflare raised its 2025 revenue forecast by more than the amount of the current beat. The company has maintained strong revenue growth of 27.32% over the last twelve months.
Jefferies highlighted that Cloudflare’s strength came primarily from large customers and its Workers platform, which the firm believes validates the market opportunity for the company’s services.
While Jefferies expressed disappointment about the departure of CJ Desai, it maintained confidence that Cloudflare’s broad product portfolio and improving sales execution should help the company reach its targeted $3 billion annual recurring revenue by the fourth quarter of 2026.
The firm’s Hold rating reflects Cloudflare’s premium valuation at 33 times estimated 2026 revenue, which Jefferies considers fully valued despite the positive business momentum. This assessment aligns with InvestingPro’s Fair Value analysis, which suggests the stock is currently overvalued. With shares trading near their 52-week high and showing a remarkable 153.68% return over the past year, investors might want to review the comprehensive Pro Research Report available for Cloudflare, one of 1,400+ US equities covered in-depth on InvestingPro.
In other recent news, Cloudflare reported third-quarter results that exceeded analyst expectations, highlighting significant revenue growth. The company posted adjusted earnings per share of $0.27, surpassing the analyst consensus of $0.23. Revenue reached $562 million, beating estimates of $544.56 million and marking a 31% increase year-over-year from $430.1 million in the same quarter last year. These results indicate a second consecutive quarter of accelerating revenue growth for Cloudflare. The positive earnings report reflects a robust financial performance, likely influencing investor sentiment. Additionally, the report may impact future analyst ratings and projections. Investors and analysts will be closely monitoring Cloudflare’s ongoing financial health and growth trajectory.
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