Cloudflare Inc. Receives Strong Growth Rating from Guru Model

Cloudflare Inc. (NET) earns a 66% rating under Partha Mohanram's P/B Growth Investor model, indicating promising fundamentals. This growth assessment highlights the stock's potential for sustained future growth in the Business Services industry.

Date: 20-02-2025

AI Rating: 5

Stock Evaluation via Guru Strategies

According to the report, Cloudflare Inc. (NET) has achieved a rating of 66% through Partha Mohanram's P/B Growth Investor model, which focuses on stocks that are valued favorably in relation to their book value and exhibit growth potential. A score of 80% or above usually signals considerable interest, indicating that while NET is positively viewed, there remains room for improvement.

Fundamental Analysis Summary

Several aspects of Cloudflare's fundamentals were examined, and here's a quick overview:

Book/Market Ratio: PASS - This indicates that the stock is likely undervalued compared to its book value, which often attracts value investors.
Return on Assets: FAIL - This suggests the company may not be efficiently using its assets to generate profits.
Cash Flow from Operations to Assets: FAIL - This failure points toward a potentially concerning liquidity position, indicating that operating cash flows do not adequately cover asset investments.
Return on Assets Variance: PASS - Positive variance indicates some effectiveness in asset management despite low overall return.
Sales Variance: PASS - This positive showing indicates the company is successfully increasing its sales.
Advertising to Assets: FAIL - This could imply the company is under-investing in marketing efforts, which may affect future growth.
Capital Expenditures to Assets: PASS - Shows that the company's reinvestment into physical assets is healthy.
Research and Development to Assets: PASS - A healthy investment in R&D can signal a commitment to innovation and future growth.

Based on this information, Cloudflare Inc. has mixed signals regarding its performance metrics, notably finding success in sales while struggling with asset returns. The company’s strong emphasis on R&D can be a good indicator of future growth.

Stocks: NET