What Is the Overall Sentiment on Cloudflare (NET) Shares?

No one could ignore Cloudflare's price drop during afternoon trading session, as the stock fell to $65.85, logging a -6.0% underperformance of the S&P 500. The stock is still trading within range of its average target price of $63.78, which may prove to be a resistance point to further declines. Analysts have given the stock target prices ranging from 38.0 to 82.0 dollars per share, with an average rating of buy.

We can use Cloudflare's short interest as a proxy for determining general market sentiment regarding the stock. The short interest is the percentage of the share float that represents short positions, meaning that the investor believes the stock will decline in the future. Since NET's short interest is 7.0%, the market sentiment is mixed on this stock.

When a stock is sold short, it means an investor has borrowed shares of the stock from their broker, and then sold them at the going market price. The investor hopes for the price to decline, so that they might buy those shares back at a lower price in the future. Once they do, they can return the borrowed shares to their broker, and keep the profit they made on the transaction.

One way to get an idea of the market sentiment on a stock is to check its rate of institutional ownership. In the case of Cloudflare, institutional investors own 89.2% of the shares, which indicates they have a very high stake in the company. What does this really tell us?

Institutional investors such as hedge funds, investment firms, and wealth managers devote significant resources to identifying good investments. If they have decided to invest in NET, it probably means they believe it is a solid investment choice.

But it could also mean they are buying up shares in an effort to acquire the company or to get seats on the board of directors. Also bear in mind that institutions are fallible (just maybe not quite as fallible as the average retail investor), so they may simply be wrong when they think they've found a good stock.

At a glance, here are some essential statistics you may want to know about NET:

  • It has trailing 12 month earnings per share (EPS) of $-0.58 per share

  • Cloudflare has a trailing 12 month Price to Earnings (P/E) ratio of -113.5

  • The company has a Price to Book (P/B) ratio of 34.23

  • Cloudflare is a Technology company, and the sector average P/E and P/B ratios

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.