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On Friday, Stifel analysts maintained their Buy rating on Cloudflare Inc . (NYSE: NYSE:NET) shares with a consistent price target of $175.00. According to InvestingPro data, the stock is currently trading at $132.42, with analyst targets ranging from $70 to $200, suggesting significant potential upside. The company has demonstrated impressive momentum with a 69.5% return over the past year. The firm’s analysts highlighted Cloudflare’s impressive first-quarter performance for fiscal year 2025, noting that the company’s revenue, operating income, and cash flow metrics exceeded both the guidance provided by the company and estimates from Stifel and other analysts.
The analysts pointed out several key achievements for Cloudflare, including the largest top-line revenue beat since the third quarter of 2020 and the signing of the company’s largest deal ever, a five-year contract valued at $130 million. Additionally, Cloudflare secured the longest Secure Access Service Edge (SASE) deal in its history, spanning seven years and worth $12.7 million. These deals contribute to Cloudflare’s robust revenue growth of 27.79% and impressive gross profit margin of 76.88%, as reported by InvestingPro.
Cloudflare also reported a record number of deals over $1 million and $5 million, marking a significant milestone for the company. The customer count continued its upward trend, growing for the eighth consecutive quarter. Emerging Artificial Intelligence (AI) initiatives and increasing traction in the Zero-Trust security space were also noted as positive indicators of Cloudflare’s ongoing success.
The company’s sales productivity has shown improvement, which is a promising sign for future growth. Looking forward to the second quarter of fiscal year 2025, Cloudflare’s expected revenue growth aligns with consensus estimates, and the company has reaffirmed its full-year guidance for fiscal year 2025, exercising caution in its projections.
Stifel’s analysis concludes that Cloudflare’s recent financial results confirm the potential for growth and success that the firm had previously identified in their upgrade note from December. The positive outlook is based on the company’s performance and strategic deals, which signal continued momentum in the market. With a market capitalization of $45.6 billion and a "GOOD" overall financial health score from InvestingPro, Cloudflare demonstrates strong fundamentals. Subscribers can access 12 additional ProTips and a comprehensive Pro Research Report, offering deeper insights into the company’s valuation and growth prospects.
In other recent news, Cloudflare Inc. reported first-quarter results that exceeded expectations with a 27% year-over-year revenue increase and confirmed its fiscal year 2025 guidance. The company’s rapid growth was highlighted by several significant contract wins, including a $130 million five-year deal for its Workers platform and its largest contract to date valued at over $100 million. Analysts have responded positively, with RBC Capital Markets and Mizuho (NYSE:MFG) Securities both raising their price targets to $155, citing Cloudflare’s strong enterprise momentum and robust sales pipeline. Cantor Fitzgerald also adjusted its price target to $126, noting a surge in sales productivity and success in securing large deals. Piper Sandler increased its price target to $151, acknowledging Cloudflare’s strategic achievements, though maintaining a Neutral rating due to valuation concerns. TD Cowen reiterated a Buy rating with a $150 price target, emphasizing Cloudflare’s successful go-to-market strategy and expansion in international markets. Despite macroeconomic challenges, Cloudflare’s management has maintained its guidance for 2025, reflecting confidence in its growth trajectory. The company’s focus on innovation and strategic business wins continues to bolster investor confidence in its potential for future growth.
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