Cloudflare's Ratings Mixed in Guru Analysis Report

Cloudflare Inc (NET) sees mixed ratings in the latest report. While the stock exhibits strong fundamentals, it fails on key metrics like EPS growth and P/E ratio, affecting its valuation attractiveness.

Date: 03-01-2025

AI Rating: 5

Analysis of Cloudflare Inc

Cloudflare Inc (NET) has received a rating of 57% based on the Value Investor model, indicating a mixed performance in terms of its financial health. The report suggests that while the company passes certain criteria, it fails in key areas like Long-Term EPS Growth, P/E Ratio, and Price/Book Ratio.

Earnings Per Share (EPS)
EPS growth is crucial for evaluating a company's profitability. In this case, Cloudflare fails to meet the expectation for Long-Term EPS Growth. This could negatively influence investor sentiment as EPS is a significant factor in determining overall valuation.

Price Earnings (P/E) Ratio
The report indicates that Cloudflare has not met the standard for a favorable P/E ratio. A high P/E ratio often signifies overvaluation, which could lead to downward pressure on stock prices if investors see the stock as overpriced relative to its earnings.

Price/Book (P/B) Ratio
Failure to achieve an appealing Price/Book ratio implies the stock may not be a strong value play, particularly for value-oriented investors following Benjamin Graham's principles. This can deter interest from value investors, potentially impacting liquidity and stock price.

On a more positive note, Cloudflare passed several other criteria, including Sales, Current Ratio, and Long-Term Debt in Relation to Net Current Assets. These points demonstrate that the company maintains a solid operational foundation, which could be appealing in a long-term perspective. However, the failures in growth metrics weigh heavily in the overall assessment.

Stocks: NET