Cloudflare Faces Bearish Sentiment as Whales Choose Puts

Bearish sentiment surrounds Cloudflare (NET) as investors show a preference for puts over calls. Analyzing options trades reveals a significant inclination toward bearish positions, impacting market outlook for the company.

Date: 26-02-2025

AI Rating: 5

**Overview of Option Activity**

The recent options activity for Cloudflare (NYSE: NET) indicates a pronounced bearish sentiment among investors, particularly those with substantial capital. Approximately 60% of the trades indicate a bearish outlook, which could negatively affect the stock price moving forward.

**Put vs. Call Activity**

A total of 10 trades were detected, with 5 trading puts and 5 calls. The put options represent a cautious approach as investors are likely hedging against potential declines. The total amount for puts reached $178,423 compared to $1,569,707 for calls, underscoring the prevailing negative sentiment.

**Target Price and Trading Ranges**

The price targets identified range from $90.0 to $175.0. This broad range suggests a lack of consensus among investors on the stock's trajectory, indicating a volatile market outlook for Cloudflare. A price target set at $140 by Baird following a rating downgrade to Neutral could also create downward pressure on the stock.

**Market Performance Metrics**

Currently trading at $145.31, the stock has experienced a minor rise of 1.52%. However, RSI indicators hint that it may be nearing an overbought condition, typically a precursor to market corrections, which could further impact investor sentiment negatively.

**Analyst Ratings**

The consensus of analysts reflects a mixed outlook: some analysts maintain buy ratings with higher price targets (Goldman Sachs at $183, Needham at $160), while others like Baird have revised their ratings to Neutral with lower targets (from a previous rating). This mixed sentiment among experts can lead to uncertainty and potentially affect stock performance.

In summary, the options activity alongside analysts' diverse ratings suggests that Cloudflare is currently navigating a complex investment landscape, heavily influenced by bearish sentiment from market participants.

Stocks: NET