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On Friday, Mizuho (NYSE:MFG) Securities demonstrated confidence in Cloudflare Inc . (NYSE: NYSE:NET) by increasing its price target on the company’s shares to $155 from the previous target of $135. The firm maintained an Outperform rating on the stock, following Cloudflare’s performance that surpassed Wall Street’s expectations. With a current market capitalization of $43 billion, InvestingPro analysis indicates the stock is trading above its Fair Value, though it maintains a "GOOD" overall financial health score.
Cloudflare’s recent financial results revealed a 27% revenue growth, significantly outpacing the forecasted 24%. This performance underscores the company’s consistent ability to exceed average revenue predictions over the last four quarters. Mizuho analysts pointed to a robust sales pipeline and a notable uptick in large deal transactions, including a record-breaking $130 million contract spanning five years. The company maintains impressive gross profit margins of 77% and a healthy current ratio of 3.2, indicating strong operational efficiency. InvestingPro subscribers can access 12 additional key insights about Cloudflare’s financial health and growth prospects.
The company’s management team has reaffirmed its full-year guidance, aligning with predictions and signaling steady progress. Mizuho’s analysis suggests that Cloudflare’s scalable architecture and commitment to innovation, particularly in the realm of AI inferencing, position the firm favorably for future growth. Despite broader economic uncertainties, Mizuho’s stance reflects a belief in Cloudflare’s potential for multi-year acceleration. For detailed analysis and comprehensive insights, investors can access Cloudflare’s full Pro Research Report, available exclusively on InvestingPro.
The reassurance from Mizuho comes at a time when investors are navigating a landscape marked by macroeconomic challenges. Yet, Cloudflare’s recent achievements and strategic outlook seem to provide a basis for Mizuho’s optimistic price target and rating. As the markets continue to monitor the company’s trajectory, the raised price target serves as a positive signal for Cloudflare’s prospects.
In other recent news, Cloudflare Inc. reported its first-quarter 2025 earnings, showing a robust performance with revenue reaching $479.1 million, which exceeded the anticipated $469.65 million. The company met analysts’ expectations with an earnings per share (EPS) of $0.16. Cloudflare’s revenue saw a 27% year-over-year increase, highlighting its strong growth trajectory. The company also maintained a gross margin of 77.1%, which is above its long-term target range.
Cloudflare’s operational efficiency was further evidenced by an operating income of $56 million, representing an 11.7% operating margin. The firm projected its second-quarter 2025 revenue to be between $500 million and $510 million, aiming for a 25% year-over-year growth. For the full year, Cloudflare expects revenue in the range of $2.090 billion to $2.094 billion.
The company also experienced growth in its customer base, with the number of paying customers increasing to approximately 251,000, marking a 27% increase from the previous year. Large customers, contributing over $100,000 annually, rose by 23% to 3,527. Furthermore, Cloudflare’s strategic focus on AI and developer platform services has been a key driver of its recent success.
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