Cloudflare, Inc. (NET) Stock Analysis: Score 27.7/100, Valuation & FAQ

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NET

Cloudflare, Inc. · Software - Infrastructure

27.7Score

$360.93Oct 9 close$128.5B

1Y Target$341.32Analyst consensus · 31 analysts

5Y Target$596.98Compound horizon

10Y Target$1,067Long-dated conviction

FCF$348mTTM · 06/26

FCF $348m — modest; watch for margin expansion · TTM from SEC filings (OCF − CapEx), four quarters to 06/26.

Rev+33.5%TTM YoY

Revenue +33.5% — hypergrowth, top decile · Latest four quarters of revenue vs the four before them, from SEC filings.

D/E2.18

D/E 2.18 — most levered decile in Technology (≈95th pctile)

P/S^*51.2x

P/S 51.2x — most expensive decile in Technology (≈95th pctile)

PEG2.38

PEG 2.38 — expensive relative to growth rate

* P/S replaces P/E — no positive earnings to divide by

Targets: 1-year is analyst consensus where covered, 5- and 10-year are model estimates; the DCF is a cross-check, not a target. Methodology

Quality-growth score · 27.7

Quality26.3

Growth94.7

Value8.5

Why this score

Diluting shareholders

Entry · Margin of safety

52-week rangeNear 52-week high

3% off the 12-month high

vs DCF fair value2321% aboveest. fair value ~$15

What the price assumes: free cash flow growing over 60% next year, slowing to 4% a year by year ten — vs a starting rate of ~25% our model takes as the middle of three readings — analyst estimates, last year's revenue growth, and the company's own multi-year record.

Quality signals

Gross profitability28% · Bgross profit ÷ total assets — not in the score

ROIC-17.3% · Freturn on invested capital — leads the quality score

Model-generatedWritten Sep 11, 2026 from the fundamentals then; figures in the text are as of that day, today's are above · Editorial standards

Why now

Cloudflare’s 33.5% FY revenue growth and expanding $348 m free‑cash‑flow give it a runway to dominate the booming edge‑security market, especially its API security and DDoS mitigation suite that protects millions of SaaS applications. The Bull Rankings model flags a Growth pillar of 95, meaning the business compounds at a rate far above sector peers, and the market already prices in a >60% annual FCF growth via the reverse‑DCF, making the current price a bet on continued hyper‑growth. The thesis rests on the ability to keep scaling its security platform across public, private and hybrid clouds, sustaining the revenue acceleration.

Moat

The moat lies in Cloudflare’s integrated security stack—web‑application firewall, bot management, DDoS mitigation, and API protection—delivered from a globally distributed network that customers embed at the edge, creating high switching costs and network effects. Enterprises that route traffic through Cloudflare’s network lock in a single point of protection, making it difficult for rivals to replicate the breadth and latency advantages without massive infrastructure investment.

Risk

The bear case centers on the company’s negative profitability: a -8.2% profit margin and -12.7% ROE signal that cash burn outpaces earnings, while a debt‑to‑equity of 2.18 adds leverage risk. If revenue growth stalls below the current 33.5% pace, the reverse‑DCF’s >60% FCF growth assumption collapses, forcing the stock toward the lower end of the analyst range. A sustained margin contraction would confirm the downside.

Horizon

1-3 yr $341.32 (31-analyst consensus) — catalyst-driven; binary events dominate. 5 yr $596.98 — requires the platform / technology to reach commercial scale. 10 yr $1,067 — return distribution heavily skewed.

NET vs the Top Picks average

Pillar	NET	Book avg	Diff
Quality	26	83	-57
Growth	95	89	+6
Value	8	76	-68

Average of today's Top 30 (mean score 82.6); size and sector limits also decide the book.

Score history · NET

Trend

-10.1 over 82 daily scores

From 37.8 (Jun 22) → 27.7 (now)

One point per daily run; read From → To for the actual range.

NET at a glance

Same audited fundamentals as the score, unless a card says otherwise.

Analyst estimate revisions

30-day change	+0.0%
90-day change	+6.2%
Forward EPS estimate	$1.68

Over the last 90 days, what analysts expect NET to earn is materially higher (+6.2%). The estimate is derived from price and forward P/E captured at the same instant, so a moving share price does not move this number — only a changed forecast does.

Estimates move both ways and are not part of the Bull Rankings score. Biggest movers →

Position sizing · NET

Portfolio

Risk per trade

Stop loss below entry

Shares to buy

Position size

$1,805

3.6% of portfolio

Stop price

$270.70

25% below $360.93

$ at risk if stopped

$451.16

budget $500.00 · 1% of portfolio

Math only: excludes commissions, slippage and gap risk. Inputs stay in your browser.

The Bull Rankings deep dive

Analysis as of September 10, 2026 · figures are as written that day and are not updated. Today's numbers are in the cards above.

Written by the Bull Rankings model from fundamentals as of Jun 30, 2026, and checked against those figures. How we source & verify every figure →

The Bull Rankings scorecard — our quality-growth score is 35.2 / 100, built from three pillars scored 0–100: Quality 26, Growth 95, Value 18 (valuation is judged against sector peers). At today's price, our reverse-DCF read says the market is implicitly betting on free-cash-flow growth of over 60% a year next year, fading to 3% a year by year ten — a gauge of how much optimism is already in the stock.

The thesis

Cloudflare’s stock is a growth‑only play that the market is already pricing at an extreme. The Bull Rankings model gives NET a 35.2/100 quality‑growth score, with Growth at 95 and Value at 18. The single sharpest point on NET today is that its revenue engine is expanding at 33.5 % YoY, and the reverse‑DCF implies a free‑cash‑flow growth of over 60 % per year (in year one, slowing to 3% a year by year ten). That implied pace dwarfs the current 33.5 % revenue growth, meaning the price already assumes cash flow grows far faster than revenue at first. If the company can keep the 33.5 % growth, the stock is already over‑valued; if it stalls, the upside evaporates quickly. Thus, the thesis is neutral‑to‑negative: the price is a premium for a growth story that may not last.

What the business actually is

Cloudflare sells a suite of cloud‑based security and performance services. Its core offerings include a web application firewall, bot management, DDoS mitigation, API security, SSL/TLS encryption, client‑side security, and a security center. On the performance side, it delivers content delivery, load balancing, DNS, smart shield, video stream delivery, and web optimization. The customer base spans enterprises, SaaS providers, and IoT device operators, all of whom need to secure and accelerate their internet presence. The revenue engine is driven by subscription contracts for these services, with a mix of public and private cloud, on‑premises, and SaaS customers.

Why it can (or can't) keep compounding

The moat lies in network effects and switching costs. Cloudflare’s global edge network is already deployed in over 200 cities, and its security stack is tightly integrated with the same infrastructure that powers its performance services. Competitors would need to build a comparable global presence and embed security into every edge node, a capital‑intensive and time‑consuming endeavor. The company’s free‑cash‑flow of $348 m is modest but growing, and the 33.5 % revenue growth indicates that the network is attracting new customers at a rapid pace. However, the profit margin of –8.2 % and a negative ROE of –12.7 % show that the business is still investing heavily to scale, and the debt‑to‑equity ratio of 2.18 signals leverage that could constrain future expansion.

The valuation question

At a current price of $314.18 and a market cap of $111.9 b, the price‑to‑sales ratio sits at 44.5. The analyst consensus 1‑year target of $336.26 reflects a modest upside, yet the reverse‑DCF tells a different story: it requires a >60 % free‑cash‑flow growth rate to justify today’s price. Comparing that to the actual 33.5 % revenue growth, the market is already betting on cash flow growing far faster than revenue, at least at first. The PEG ratio of 2.38 further signals that the price is high relative to growth expectations. In short, the valuation is already steep; any slowdown in growth would quickly erode the premium.

The bear case

The strongest skeptic points to the Diluting shareholders signal in the model: stock‑based pay keeps growing the share count. Cloudflare also has a debt‑to‑equity of 2.18, and its negative profit margin and ROE suggest that it is not yet generating sustainable profits. If the company keeps losing money as it expands its network, the debt burden could force a deleveraging that would hurt earnings and free‑cash‑flow growth. A concrete trigger would be a decline in revenue growth below 33.5 % or a widening of the negative margin beyond –8.2 %. Such a shift would confirm that the growth story is faltering and that the price premium is unwarranted.

What would change our mind

If revenue growth accelerates beyond its current pace.
If profit margin improves to a positive level and stays there.
If the debt‑to‑equity ratio falls while free‑cash‑flow grows.

Any of these developments would shift the thesis from cautious to bullish, as the valuation would then be justified by sustainable growth and improved profitability.

Cloudflare, Inc. (NET): score, valuation & FAQ

Cloudflare, Inc. (NET) is a Software - Infrastructure company that scores 27.7 out of 100 on the Bull Rankings quality-growth model — a weak reading. The score blends three pillars — quality (durable returns, healthy margins, low leverage), growth (revenue and earnings), and value (valuation versus sector peers) — into one number, refreshed daily; it is a screen, not a buy recommendation.

Its strongest graded signals are Rev (A), while D/E (D) and P/S (D) rate weaker. On valuation, NET sits about 2321% above our discounted-cash-flow fair value — the current price implies free cash flow growing over 60% next year, slowing to 4% a year by year ten.

Is NET a good stock to buy?

Bull Rankings scores NET 27.7 out of 100 on its quality-growth model, which is a weak reading. That is driven by Rev (A). A score is a quantitative screen of Cloudflare, Inc.'s fundamentals, not personalised financial advice — weigh it against your own time horizon and risk tolerance, and read the risk factors below before acting.

Why does NET score 27.7 on Bull Rankings?

The score leans on growth at 94.7 out of 100, with value the weakest pillar at 8.5 — the three combine geometrically, so a weak one cannot be papered over by a strong one. NET earns its highest marks on Rev (A), and is held back by D/E (D) and P/S (D). Each signal is graded against sector-aware thresholds rather than one absolute bar, so NET is measured against Software - Infrastructure peers, not against the market as a whole.

Is NET overvalued or undervalued?

Based on $360.93, NET sits about 2321% above our discounted-cash-flow fair value — the current price implies free cash flow growing over 60% next year, slowing to 4% a year by year ten. Discounted-cash-flow estimates are sensitive to growth and discount-rate assumptions, so treat this as a cross-check, not a price target.

What are the main risks of investing in NET?

The bear case centers on the company’s negative profitability: a -8.2% profit margin and -12.7% ROE signal that cash burn outpaces earnings, while a debt‑to‑equity of 2.18 adds leverage risk. If revenue growth stalls below the current 33.5% pace, the reverse‑DCF’s >60% FCF growth assumption collapses, forcing the stock toward the lower end of the analyst range. A sustained margin contraction would confirm the downside.

New to these metrics? See the guides and the methodology.

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