Cloudflare (NET) Valuation Check As Shares Slip Despite Strong Recent Momentum

Simply Wall St.03:05

AdvertisementCloudflare stock snapshot and recent performance Cloudflare (NET) shares recently closed at US$210.13, with the stock showing a 3.6% decline over the past day and a 5.1% decline over the ...

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See our latest analysis for Cloudflare. While Cloudflare’s share price has slipped in the past week, its 28.3% 1 month share price return and 77.2% 1 year total shareholder return suggest momentum has been strong over both shorter and longer periods. If Cloudflare’s move has you thinking about what else is powering AI infrastructure, it could be worth scanning 35 AI infrastructure stocks. With Cloudflare trading at US$210.13, annual revenue of about US$2.17b and a recent annual net loss of US$102.27m, is the current price a fair reflection of future growth, or is the market already pricing it in? Most Popular Narrative: 10% Undervalued Cloudflare’s most followed narrative puts fair value at about $232.43, above the last close at $210.13. This sets up a clear valuation gap for investors to assess.  The accelerating adoption of AI, explosion in global web traffic, and proliferation of IoT devices are driving increased demand for fast, secure, and resilient cloud-native infrastructure, Cloudflare's core strength, evidenced by strategic partnerships with major AI companies and record-breaking DDoS mitigation, positioning the company for sustained top-line revenue growth and strengthening customer retention.  Read the complete narrative. Curious what kind of revenue runway, margin shift, and earnings profile need to line up for that fair value to make sense? The narrative leans on ambitious growth, a sharp profitability turn, and a future earnings multiple that assumes Cloudflare keeps winning key workloads. Result: Fair Value of $232.43 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, even a 10% valuation gap can close quickly if competition in security and AI workloads intensifies, or if new AI initiatives struggle to generate meaningful revenue. Find out about the key risks to this Cloudflare narrative. Another way to look at valuation That 10% gap to the US$232.43 fair value is one story, but the current P/S of 34.1x tells another. It sits far above the US IT industry at 1.7x, peers at 10.3x, and even the fair ratio of 13x. This points to meaningful valuation risk if sentiment cools. To see how that P/S level stacks up in more detail, including how it could move toward the fair ratio over time, See what the numbers say about this price — find out in our valuation breakdown. NYSE:NET P/S Ratio as at Mar 2026Next Steps Seen enough to form an opinion, or still on the fence about how the risks and rewards balance out here? Act while the data is fresh in your mind and pressure test your own view by weighing up the 1 key reward and 1 important warning sign Ready for more investing ideas? If Cloudflare has sharpened your thinking, now is the moment to widen your watchlist and spot other opportunities before they move out of reach.  Target quality at a discount by scanning companies screened as 61 high quality undervalued stocks that pair strong fundamentals with prices that may not fully reflect them yet. Prioritise resilience by reviewing the solid balance sheet and fundamentals stocks screener (39 results) when you want businesses backed by healthier finances and less fragile capital structures. Get ahead of the crowd by checking the screener containing 25 high quality undiscovered gems that focus on strong underlying metrics before wider attention arrives.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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