Cloudflare CFO sells over $1.17 million in company stock

Cloudflare, Inc. (NYSE:NET) Chief Financial Officer Thomas J. Seifert has recently sold shares of the company's stock, according to the latest filings with the Securities and Exchange Commission. On September 4, 2024, Seifert sold a total of 15,000 shares of Class A Common Stock at prices ranging from $77.4472 to $79.0985, amounting to over $1.17 million.

The transactions were executed in multiple trades, with the prices of shares varying within the provided range. Specifically, 3,931 shares were sold at an average price of $77.4472, with individual sales prices between $76.70 and $77.69. Another batch of 8,769 shares was sold at an average price of $78.053, where the prices ranged from $77.71 to $78.68. The final set of 2,300 shares was sold at an average price of $79.0985, with sales prices from $78.71 to $79.58.

These sales were conducted under a pre-arranged trading plan, known as a Rule 10b5-1 trading plan, which Seifert had adopted on November 27, 2023. Such plans allow company insiders to sell shares over a predetermined period of time to avoid concerns about transactions based on access to non-public information.

Following the sales, Seifert's direct ownership in Cloudflare's Class A Common Stock has reduced to 281,403 shares. It's important to note that the reporting officer holds additional indirect interests in Class B Common Stock through various trusts and partnerships, as detailed in the footnotes of the SEC filing.

Investors often monitor insider transactions as they may provide insights into executives' perspectives on the company's current valuation and future prospects. However, such sales can also be part of personal financial planning and diversification strategies and do not always signal a change in company outlook.

Cloudflare, based in San Francisco, specializes in services related to website security, performance, and reliability. The company has been a significant player in the prepackaged software industry, with its offerings being critical for protecting and accelerating websites online.

In other recent news, Cloudflare has reported a substantial increase in its Q2 2024 financial results. The company's revenue rose by 30% year-over-year, reaching $401 million, and it also posted a significant $1.6 billion in annualized revenue. Additionally, Cloudflare added 168 new large customers, bringing the total to 3,046, contributing 67% to the revenue. The company also reported strong profitability indicators, including an operating profit of $57 million and a free cash flow of $38.3 million.

Susquehanna Financial Group has adjusted its price target for Cloudflare, raising it to $85 from the previous $80, while maintaining a neutral rating on the stock. This adjustment reflects Susquehanna's recognition of strong momentum within Cloudflare's operations, including its ongoing refinements in go-to-market strategies and its growing presence in Secure Access Service Edge and other security solutions.

Looking ahead, Cloudflare forecasts Q3 revenue to be between $423 million and $424 million, and full year 2024 revenue expected to be between $1,657 million and $1,659 million. The company's developer platform, Cloudflare Workers, has also experienced accelerated adoption, with a 67% increase in developer accounts utilizing Workers AI.

InvestingPro Insights

Cloudflare's financial standing is a crucial factor for investors, especially in light of recent insider transactions. According to InvestingPro, Cloudflare is expected to see net income growth this year, which could be a positive indicator for potential investors weighing the significance of CFO Thomas J. Seifert's stock sales. Additionally, the company has been recognized for its impressive gross profit margins, which have reached 77.3% over the last twelve months as of Q2 2024.

InvestingPro data shows Cloudflare with a market capitalization of $26.82 billion and a high Price / Book multiple of 30.39 as of the last twelve months, reflecting a premium valuation by the market. The company's revenue also experienced a robust growth of 31.09% during the same period. These metrics underscore the company's strong financial performance and market confidence, despite the absence of dividend payments to shareholders, which is another notable point for investors considering the company's stock.

For those interested in a deeper analysis, there are additional InvestingPro Tips available that can provide further insight into Cloudflare's financial health and market position. With 10 more tips listed on InvestingPro, investors have access to a comprehensive view of the company's performance metrics and future outlook.

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