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NET
NET
Cloudflare, Inc.

Latest update

$272

Updated: Jul 16, 2026, 8:48 PM UTC

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Metrics

Cloudflare, Inc. (NET) Business Overview and Q1 2026 Performance

Cloudflare, Inc. is a cloud services provider offering security, performance, and developer-based solutions globally. Its offerings span application security (WAF, Bot Management, API Security), performance optimization (CDN, DNS, Load Balancing), SASE, Zero Trust services, and developer tools like Workers AI, R2 object storage, and Cloudflare Workers. Cloudflare serves a broad range of industries including technology, healthcare, financial services, and government.

Growth pace
How fast the underlying business is moving, quarter by quarter. Hover any tile for the plain-English meaning.

Revenue

The total dollars the company billed customers. When this number grows quarter after quarter, the business is finding more demand.

quarterly

Latest

$639.8M

Q1 2026

The most recent reported figure, in the company's own currency and reporting cadence.

QoQ

+4.1%

vs Q4 2025

How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.

YoY

+33.5%

vs Q1 2025

How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.

CAGR

insufficient history

The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.

Net income

What's left from revenue after paying every cost — employees, materials, taxes, interest. Sometimes called profit or 'the bottom line.'

quarterly

Latest

-$22.9M

Q1 2026

The most recent reported figure, in the company's own currency and reporting cadence.

QoQ

vs Q4 2025

How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.

YoY

vs Q1 2025

How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.

CAGR

insufficient history

The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.

Free cash flow

The cash actually left in the bank after the company has paid for everything and reinvested in itself. Harder to fake than net income.

quarterly

Latest

$84.1M

Q1 2026

The most recent reported figure, in the company's own currency and reporting cadence.

QoQ

-15.5%

vs Q4 2025

How much this quarter grew compared to last quarter. Useful for spotting acceleration or slowdown in real time.

YoY

+59.0%

vs Q1 2025

How much this quarter grew compared to the same quarter one year ago. Strips out seasonality — a slow holiday quarter looks worse QoQ but normal YoY.

CAGR

insufficient history

The smooth yearly growth rate that gets you from the starting value to the current value. A 100% CAGR over 3 years means the business tripled, on average, each year.

Quarterly revenue, net income & free cash flow
Bars show what the company actually reported each quarter. The growth chart below turns these into the QoQ / YoY pace the rest of this page uses.
Annual growth rate (YoY)
Year-over-year change in full-year totals. Strips out quarterly noise and seasonality so the multi-year trend is visible — not just the last 12 months.
Compound annual growth (CAGR)
The smooth yearly growth rate across each window. The "start → end" line shows the dollar value at the beginning and end of the window.
Metric3 yr2 yr1 yr
Revenue
+33.6%
$479.1M$639.8M
Net income
Free cash flow
+59.1%
$52.9M$84.1M
Valuation — P/E

P/E TTM

Trailing twelve months. Today's price divided by the last year of actual earnings.

P/E NTM

172.6×

Next twelve months. Today's price divided by what analysts expect the company to earn over the coming year.

Balance sheet & valuation
The five numbers that decide whether the growth above is safe, sustainable, and reasonably priced. Descriptions on every tile — hover or scroll to read.

Profitability

Weak

Operating margin (and the wider return profile) tells you how efficiently each dollar of sales becomes profit. High and rising = pricing power; low or falling = the business is grinding.

Share count

Stable

Are the buybacks outrunning the stock-based comp? A shrinking share count means every existing share owns a bigger slice of future earnings.

Debt load

Light

Total debt against cash and earnings power (EBITDA). Light debt leaves room to invest and weather downturns; heavy debt shrinks the margin for error.

Debt service

Mixed

Whether the cash the business generates easily covers its interest and loan payments. Strong here = no forced selling in a bad year.

Cash return at today's price

0.8%

Free cash flow divided by market cap — the cash yield you're getting for the price you pay. Above ~6% is rich, below ~3% is thin. P/E shown when the yield is too small to be useful.

What stands out
  • Revenue growth is strong, with Q1 2026 revenue at $639.8M, up 33.5% year-over-year, and free cash flow showing significant YoY growth of 59.0%.
  • Despite strong revenue and FCF growth, the company is not currently profitable, with a net loss of $22.9M and negative operating margins (-9.7%).
  • The balance sheet appears robust with a light debt load, a healthy current ratio of 2.0, and sufficient operating cash flow to cover debt service.
  • Valuation metrics show a high forward P/E of 172.6x, indicating expectations for future earnings, while the cash return at today's price is low at 0.8%.
  • Share count is stable, and gross margin is strong at 73.3%, suggesting underlying business efficiency before operating expenses.
  • Revisions to earnings estimates have been positive in the past 90 days but flat in the most recent 30 days.

Thesis

Why this read

While the long-term thesis and cycle are strongly bullish for Cloudflare, the stock is showing signs of short-term exhaustion, trading 6.6% above its daily 21 EMA and 20.4% above its weekly 21 EMA. Volume is contracting, indicating that recent gains might not be backed by strong buying pressure. Given the significant extension and the upcoming earnings event, a tactical 'WAIT' is appropriate to allow for potential consolidation or a healthier pullback, offering a better entry point consonant with the MARKUP cycle.

Short-term thesis

Mixed85% conviction+15 ptsv1
Size small or stay away

The risk sleeve is too fragile to support aggressive exposure.

Long-term exposure

Maybe own

There is a case here, but one sleeve still needs work.

Entry window

Wait

Cloudflare shows strong fundamental momentum but is currently extended from its short-term moving average. While the underlying trend is positive, waiting for a healthier entry point or consolidation closer to support is prudent. The current price extension suggests near-term caution, despite the positive long-term outlook.

Risk check

Fragile

The downside can widen quickly if this setup goes wrong.

Alignment

Mixed

Neither horizon fully wins, so size and patience matter.

What supports it

  • Price still looks reasonable against the business.
  • Balance sheet gives the thesis room to breathe.
  • The stock is leading the broad market by 17.9 points over the past month.
  • The stock is also leading its sector by 22.7 points.

What limits it

  • This needs smaller size or more patience.
  • Margins or returns are too soft for a clean long hold.
  • One sleeve still needs more evidence.
  • Current price is significantly extended above its short-term and weekly moving averages, indicating overbought conditions.

Long-term thesis

The pervasive shift towards Artificial Intelligence and edge computing will fundamentally reshape internet infrastructure, requiring a global network fabric capable of low-latency compute and data processing. Cloudflare is positioned to be this foundational layer.

88opportunity85% thesis conf
Crossing Chasm5y horizon

Bottleneck Role

Global Gatekeeper/Inference Edge. Cloudflare is uniquely positioned as the critical distributed layer enabling compute and data processing at the network's edge, serving as the connective tissue between users, IoT devices, and cloud/hybrid infrastructure.

Consensus Blind Spot

The market largely views Cloudflare as an improved CDN/security vendor. It has yet to fully grasp its emerging role as a critical, foundational platform for AI inference and serverless edge compute, which will unlock significant new revenue streams and margin expansion, moving it beyond traditional infrastructure valuations.

Demand Gap

The exponentially growing demand for extremely low-latency AI inference and application logic executed geographically close to users and data sources. Traditional centralized cloud models cannot meet these stringent performance requirements at scale.

Demand to Equity Scenarios

Bull90% conf

Rapid acceleration of AI inference at the edge, widespread adoption of serverless architectures (Workers), and significant migration to R2 object storage for distributed applications.

Demand

Earnings

+50%

Equity implication

+75%

Massive increase in usage and compute consumption on the Workers platform and R2, driving subscription and usage-based revenue growth with high operating leverage due to fixed network cost.

Base80% conf

Steady growth in edge computing adoption, continued migration of web properties to Cloudflare for security and performance, and gradual expansion of Workers/R2 use cases.

Demand

Earnings

+25%

Equity implication

+35%

Consistent revenue growth from existing and new customer acquisition for core services, augmented by growing adoption of Workers/R2, leading to predictable earnings expansion.

Bear60% conf

Slower-than-expected adoption of edge applications, increased competition from hyperscalers entering the edge space, or regulatory hurdles for data localization/privacy.

Demand

Earnings

-20%

Equity implication

-30%

Reduced demand for new services, margin pressure due to competition, and increased compliance costs, leading to slower revenue growth and delayed profitability.

Dependency Chain

  1. 1Rapid growth of AI applications requiring real-time inference.
  2. 2Increased demand for distributed applications & data processing at the edge.
  3. 3Bottleneck in centralized cloud architectures for latency-sensitive workloads.
  4. 4Cloudflare's Workers and R2 provide distributed compute and storage on a global network.
  5. 5Increased utilization of Cloudflare's platform drives network effects and margin leverage.
  6. 6Stronger earnings growth and re-rating of Cloudflare's valuation towards platform multiples.

Repricing Triggers

  • Accelerated customer adoption of Workers AI and R2, leading to significant revenue upside surprises.
  • Positive shifts in profitability metrics and sustained free cash flow growth.
  • Analyst upgrades and increased institutional interest recognizing Cloudflare's platform value.
  • Announcement of major AI partnerships or significant enterprise wins leveraging edge capabilities.
  • Clear articulation by management on future margin expansion tied to new AI/edge services.

Must be true

  • The demand for low-latency AI inference and distributed applications will continue its rapid growth trajectory.
  • Cloudflare maintains its technological leadership and execution advantage in edge computing and serverless architectures.
  • The total addressable market for edge AI and distributed computing is sufficiently large to sustain Cloudflare's growth ambitions.
  • Hyperscalers' entry into the edge market will not significantly erode Cloudflare's competitive moat or pricing power.
  • Cloudflare successfully converts its high gross margins into operating profitability over time through scale and efficiency gains.

Thesis broken if

  • Deceleration in Workers and R2 adoption rates or revenue contribution.
  • Significant loss of market share to competing edge platforms.
  • Persistent operating losses despite strong revenue growth, indicating lack of operating leverage.
  • Increased customer churn or dissatisfaction with platform performance or cost.
  • Negative revisions to long-term growth forecasts by management or analysts.

History

What changed

Since the previous run · 1 month ago
Prior call was right

Signal

BUYBUY

Conviction

80%70%-10 pts

Long term

Maybe ownMaybe own

Stock

$223.97$272.46+21.7%

Added since last run

8
  • Strong underlying revenue growth and free cash flow expansion.
  • Robust relative strength against the broader market and sector.
  • Positive historical price performance following the last buy signal.
  • High gross margins supporting future profitability.
  • Current price is significantly extended above its short-term and weekly moving averages, indicating overbought conditions.
  • Contracting volume suggests a lack of strong conviction backing the recent price increase.
  • High forward P/E and current unprofitability increase sensitivity to market downturns or growth disappointments.
  • Upcoming earnings event is near, posing short-term risk.

No longer flagged

0

Nothing dropped this run

Model's reflection on the prior call

The prior call to 'BUY' at $223.97 was accurate, as the price moved in the predicted direction, rising 21.7%. The reasoning about Cloudflare pulling back and finding support proved correct.

Analysis timeline
3 runs

Jul 16, 2026

Latest

Updated Jul 16, 2026, 8:48 PM UTC

WeeklyWAIT
Long termWATCH
Confidence70% · Medium

Price at review

$272

Cloudflare shows strong fundamental momentum but is currently extended from its short-term moving average. While the underlying trend is positive, waiting for a healthier entry point or consolidation closer to support is prudent. The current price extension suggests near-term caution, despite the positive long-term outlook.

Jun 11, 2026

Updated Jun 11, 2026, 5:07 PM UTC

WeeklyBUY
Long termWATCH
Confidence80% · High

Price at review

$224

Cloudflare has pulled back from its prior overextended level, finding support and now consolidating near a key moving average. This presents a favorable entry point for long-term accumulation.

Jun 4, 2026

Updated Jun 4, 2026, 2:13 PM UTC

WeeklyWAIT
Long termWATCH
Confidence90% · High

Price at review

$264

The stock is currently overextended and likely to pause or pull back slightly after a rapid move higher.