Here's What You May Have Missed About Cloudflare (NET)

Shares of Large-cap technology company Cloudflare moved 6.9% this evening, and are now trading at $69.52 per share. The average analyst target price for the stock is $63.78.

CloudFlare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide.

Based on its trailing earning per share of -0.58, Cloudflare has a trailing 12 month Price to Earnings (P/E) ratio of -119.9 NET has a forward P/E ratio of 165.5.

The company has a price to earnings growth (PEG) ratio of 3.08. A number between 0 and 1 could mean that the market is undervaluing Cloudflare's estimated growth potential

The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged

2020-02-10 2021-02-25 2022-03-01 2023-02-24
Revenue (k) $287,022 $431,059 $656,426 $975,241
Gross Margins 77.9% 76.6% 77.6% 76.2%
Operating Margins -37.6% -24.8% -19.4% -20.6%
Net Margins -36.87% -27.69% -39.66% -19.83%
Net Income (k) -$105,828 -$119,370 -$260,309 -$193,381
Net Interest Expense (k) $4,675 -$18,376 -$47,264 $9,893
Depreciation & Amort. (k) -$29,479 -$49,387 -$66,607 -$102,335
Earnings Per Share -$0.72 -$0.4 -$0.83 -$0.58
EPS Growth n/a 44.44% -107.5% 30.12%
Diluted Shares (k) 146,306 299,774 314,543 289,519
Free Cash Flow (k) $4,372 $39,246 $157,634 $267,201
Capital Expenditures -$43,289 -$56,375 -$92,986 -$143,606
Net Current Assets (k) $584,876 $566,243 $395,144 -$76,060
Current Ratio 8.22 7.99 6.78 4.74
Long Term Debt (k) $10,506 $383,275 $1,146,877 $1,436,192
LT Debt to Equity 0.01 0.47 1.41 2.3

Cloudflare benefits from growing revenues and increasing reinvestment in the business, a pattern of improving cash flows, and an excellent current ratio. The company's financial statements show wider gross margins than its peer group and positive EPS growth. However, the firm suffers from consistently negative margins with a positive growth rate and high levels of debt.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.