CLOUDFLARE INC - CLASS A (NET) Stock Fundamental Analysis
NYSE:NET - New York Stock Exchange, Inc. - US18915M1071 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to NET. NET was compared to 82 industry peers in the IT Services industry. NET scores quite bad on profitability, while its financial health is fine. Not spectacular, but in line with the averages. NET shows excellent growth, but is valued quite expensive already.
1. Profitability
1.1 Basic Checks
NET had positive earnings in the past year.
In the past year NET had a positive cash flow from operations.
In the past 5 years NET always reported negative net income.
The reported operating cash flow has been mixed in the past 5 years: NET reported negative operating cash flow in multiple years.
1.2 Ratios
Looking at the Return On Assets, with a value of -3.06%, NET is in line with its industry, outperforming 41.77% of the companies in the same industry.
Looking at the Return On Equity, with a value of -9.64%, NET is in line with its industry, outperforming 41.77% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.06% | ||
| ROE | -9.64% | ||
| ROIC | N/A |
ROA(3y)-8.37%
ROA(5y)-9.3%
ROE(3y)-29%
ROE(5y)-23.24%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
NET has a better Gross Margin (77.53%) than 94.94% of its industry peers.
In the last couple of years the Gross Margin of NET has remained more or less at the same level.
NET does not have Profit Margin and Operating Margin available, so we won't be analyzing them here.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 77.53% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.1%
GM growth 5Y-0.27%
2. Health
2.1 Basic Checks
NET does not have a ROIC to compare to the WACC, probably because it is not profitable.
The number of shares outstanding for NET has been increased compared to 1 year ago.
NET has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, NET has an improved debt to assets ratio.
2.2 Solvency
NET has an Altman-Z score of 12.65. This indicates that NET is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of NET (12.65) is better than 92.41% of its industry peers.
NET has a debt to FCF ratio of 7.57. This is a slightly negative value and a sign of low solvency as NET would need 7.57 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 7.57, NET is in line with its industry, outperforming 43.04% of the companies in the same industry.
A Debt/Equity ratio of 1.32 is on the high side and indicates that NET has dependencies on debt financing.
NET has a worse Debt to Equity ratio (1.32) than 72.15% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 7.57 | ||
| Altman-Z | 12.65 |
ROIC/WACCN/A
WACC11.56%
2.3 Liquidity
A Current Ratio of 3.37 indicates that NET has no problem at all paying its short term obligations.
NET's Current ratio of 3.37 is amongst the best of the industry. NET outperforms 87.34% of its industry peers.
NET has a Quick Ratio of 3.37. This indicates that NET is financially healthy and has no problem in meeting its short term obligations.
NET has a Quick ratio of 3.37. This is amongst the best in the industry. NET outperforms 87.34% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 3.37 | ||
| Quick Ratio | 3.37 |
3. Growth
3.1 Past
NET shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 77.50%, which is quite impressive.
NET shows a strong growth in Revenue. In the last year, the Revenue has grown by 30.04%.
Measured over the past years, NET shows a very strong growth in Revenue. The Revenue has been growing by 46.42% on average per year.
EPS 1Y (TTM)77.5%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%25%
Revenue 1Y (TTM)30.04%
Revenue growth 3Y44.35%
Revenue growth 5Y46.42%
Sales Q2Q%28.15%
3.2 Future
NET is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 43.38% yearly.
The Revenue is expected to grow by 26.59% on average over the next years. This is a very strong growth
EPS Next Y53.57%
EPS Next 2Y32.64%
EPS Next 3Y29.97%
EPS Next 5Y43.38%
Revenue Next Year29.28%
Revenue Next 2Y27.5%
Revenue Next 3Y26.84%
Revenue Next 5Y26.59%
3.3 Evolution
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
NET is valuated quite expensively with a Price/Earnings ratio of 174.55.
Compared to the rest of the industry, the Price/Earnings ratio of NET is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 28.64, NET is valued quite expensively.
The Price/Forward Earnings ratio is 143.76, which means the current valuation is very expensive for NET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NET is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of NET to the average of the S&P500 Index (24.51), we can say NET is valued expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 174.55 | ||
| Fwd PE | 143.76 |
4.2 Price Multiples
Based on the Price/Free Cash Flow ratio, NET is valued a bit more expensive than the industry average as 62.03% of the companies are valued more cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 250.37 | ||
| EV/EBITDA | N/A |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
A more expensive valuation may be justified as NET's earnings are expected to grow with 29.97% in the coming years.
PEG (NY)3.26
PEG (5Y)N/A
EPS Next 2Y32.64%
EPS Next 3Y29.97%
5. Dividend
5.1 Amount
No dividends for NET!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
CLOUDFLARE INC - CLASS A
NYSE:NET (1/23/2025, 9:20:56 PM)
Premarket: 124.25 +0.32 (+0.26%)123.93
+0.84 (+0.68%)
Chartmill FA Rating
GICS SectorInformation Technology
GICS IndustryGroupSoftware & Services
GICS IndustryIT Services
Earnings (Last)
Earnings (Next)
Inst Owners86.59%
Inst Owner Change-0.07%
Ins Owners0.6%
Ins Owner Change-1.76%
Market Cap42.53B
Analysts70.53
Price Target99.36 (-19.83%)
Short Float %2.69%
Short Ratio2.74
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)23.27%
Min EPS beat(2)8.71%
Max EPS beat(2)37.83%
EPS beat(4)4
Avg EPS beat(4)23.2%
Min EPS beat(4)8.71%
Max EPS beat(4)37.83%
EPS beat(8)8
Avg EPS beat(8)43.69%
EPS beat(12)12
Avg EPS beat(12)401.01%
EPS beat(16)15
Avg EPS beat(16)312.32%
Revenue beat(2)2
Avg Revenue beat(2)0.5%
Min Revenue beat(2)0.4%
Max Revenue beat(2)0.59%
Revenue beat(4)4
Avg Revenue beat(4)0.77%
Min Revenue beat(4)0.4%
Max Revenue beat(4)1.64%
Revenue beat(8)5
Avg Revenue beat(8)0.21%
Revenue beat(12)9
Avg Revenue beat(12)0.82%
Revenue beat(16)13
Avg Revenue beat(16)1.62%
PT rev (1m)3.88%
PT rev (3m)5.29%
EPS NQ rev (1m)0%
EPS NQ rev (3m)7.34%
EPS NY rev (1m)0%
EPS NY rev (3m)3.76%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.9%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.12%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 174.55 | ||
| Fwd PE | 143.76 | ||
| P/S | 27.05 | ||
| P/FCF | 250.37 | ||
| P/OCF | 125.62 | ||
| P/B | 43.71 | ||
| P/tB | 53.39 | ||
| EV/EBITDA | N/A |
EPS(TTM)0.71
EY0.57%
EPS(NY)0.86
Fwd EY0.7%
FCF(TTM)0.49
FCFY0.4%
OCF(TTM)0.99
OCFY0.8%
SpS4.58
BVpS2.84
TBVpS2.32
PEG (NY)3.26
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -3.06% | ||
| ROE | -9.64% | ||
| ROCE | N/A | ||
| ROIC | N/A | ||
| ROICexc | N/A | ||
| ROICexgc | N/A | ||
| OM | N/A | ||
| PM (TTM) | N/A | ||
| GM | 77.53% | ||
| FCFM | 10.81% |
ROA(3y)-8.37%
ROA(5y)-9.3%
ROE(3y)-29%
ROE(5y)-23.24%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.1%
GM growth 5Y-0.27%
F-Score6
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.32 | ||
| Debt/FCF | 7.57 | ||
| Debt/EBITDA | N/A | ||
| Cap/Depr | 132.14% | ||
| Cap/Sales | 10.73% | ||
| Interest Coverage | N/A | ||
| Cash Conversion | N/A | ||
| Profit Quality | N/A | ||
| Current Ratio | 3.37 | ||
| Quick Ratio | 3.37 | ||
| Altman-Z | 12.65 |
F-Score6
WACC11.56%
ROIC/WACCN/A
Cap/Depr(3y)140.26%
Cap/Depr(5y)153.37%
Cap/Sales(3y)14.52%
Cap/Sales(5y)16.19%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)77.5%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%25%
EPS Next Y53.57%
EPS Next 2Y32.64%
EPS Next 3Y29.97%
EPS Next 5Y43.38%
Revenue 1Y (TTM)30.04%
Revenue growth 3Y44.35%
Revenue growth 5Y46.42%
Sales Q2Q%28.15%
Revenue Next Year29.28%
Revenue Next 2Y27.5%
Revenue Next 3Y26.84%
Revenue Next 5Y26.59%
EBIT growth 1Y15.76%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year206.95%
EBIT Next 3Y76.68%
EBIT Next 5Y61.32%
FCF growth 1Y362.18%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y293.27%
OCF growth 3YN/A
OCF growth 5YN/A