Cloudflare, Inc. (NET) Down 5.0% — Is It Time to Move On?
Cloudflare, Inc. (NET) spent the latest session under clear pressure, retreating 4.98% as the stock fell from the prior close of $205.95 to $195.69. That move left shares losing about $10.26 in market value on the day, extending a pattern of recent weakness and signaling that buyers are ceding ground in the near term. Trading activity was muted relative to normal levels, with roughly 1.64 million shares changing hands versus a 90-day average closer to 2.80 million, suggesting the pullback came on softer participation rather than heavy-volume capitulation.
From a longer-term perspective, the stock continues to slide away from its peak, now sitting meaningfully below its 52-week high of $260.00 set on Nov. 3, 2025. At the current quote, Cloudflare is more than $60 off that high-water mark, underscoring how far the shares have retreated from their recent extremes and how much ground would need to be recovered to revisit prior levels. Within the broader cloud and security group, names such as CrowdStrike (CRWD), Snowflake (SNOW), and Datadog (DDOG) have also experienced bouts of volatility, but Cloudflare’s latest session stands out for its sharp single-day percentage drop and continued loss of momentum. Overall, the recent price action points to a stock that is sliding rather than stabilizing, with the balance of trading skewed toward sellers for now.
Why Cloudflare, Inc. Price is Moving Lower
The recent softness in Cloudflare, Inc. shares is occurring against a backdrop of muted catalysts and rising expectations, creating a setup where even modest concerns can pressure the stock. With the next major event—the Q4 2025 earnings release—still ahead on Feb. 10, 2026, traders lack a fresh fundamental trigger to justify pushing the price higher in the near term. In this kind of vacuum, valuation and execution risk tend to dominate. Cloudflare’s revenue growth remains robust at roughly 30.7% year over year and 9.7% quarter over quarter, but the company is still posting a negative profit margin of about -5.1% and negative EPS of -$0.30, which can heighten investor unease at current price levels.
Expectations heading into the next report also raise the bar. The Zacks Consensus calls for $0.18 in EPS, with a full‑year outlook near $1.00 after a recent quarter that only met, rather than exceeded, estimates at $0.16. That shift—from consistent beats to merely in-line results—can cool enthusiasm for high-growth, high-multiple names, especially in a crowded software and services field that includes competitors such as CrowdStrike, Snowflake, and Datadog. With trading volume running below its 90‑day average, incremental buyers appear more cautious, leaving the stock more vulnerable to selling pressure as investors reassess how much they are willing to pay for strong top-line expansion that has yet to fully translate into sustainable profitability.
What is the Cloudflare, Inc. Rating - Should I Sell?
Weiss Ratings assigns NET a D rating. Current recommendation is Sell. The stock was upgraded on 3/4/2025, but that move only brings it into the lower tier of our scale, where downside risk still outweighs reward. In other words, even after the upgrade, NET remains an underperformer versus stocks with similar risk profiles.
The core problem is that Cloudflare’s business progress has not translated into a favorable risk/reward trade-off for shareholders. The company posts strong top-line expansion, as seen in its 30.68% revenue growth, which aligns with a Good Growth Index. However, that growth comes with a -5.11% profit margin and an extreme forward P/E of -692.50, signaling investors are paying a steep price for earnings that have yet to materialize. The Very Weak Efficiency Index confirms that management is not yet converting assets and capital into sustainable profitability.
On the risk side, Cloudflare does benefit from an Excellent Solvency Index, which indicates a solid balance sheet and capacity to meet obligations. But this strength has not been enough to protect investors from disappointing performance. The Fair Total Return Index and Fair Volatility Index show that, even with manageable price swings, the overall return has lagged alternatives with comparable risk.
Within the Information Technology sector, Cloudflare’s D rating is in line with other higher-risk names such as CrowdStrike Holdings, Inc. (CRWD, D+) Datadog, Inc. (DDOG, D+), and weaker peers like Snowflake Inc. (SNOW, D-). That clustering in the lower rating bands reinforces the idea that investors in this group face significant risk, and Cloudflare does not currently stand out as a safer or more rewarding choice.
About Cloudflare, Inc.
Cloudflare, Inc. is a San Francisco–based information technology company focused on delivering cloud-native security, networking, and performance solutions. Operating within the Software and Services industry, it positions itself as an intermediary layer between internet users and applications, attempting to protect and accelerate web properties and corporate networks. The company’s integrated cloud-based security platform is designed to secure public and private cloud environments, on-premises infrastructure, software-as-a-service applications, and Internet of Things (IoT) devices. Its security product set is heavily concentrated in website and application protection, including web application firewall, bot management, distributed denial-of-service mitigation, API security, SSL/TLS encryption, script management, security center, and rate limiting.
Beyond security, Cloudflare seeks to handle performance and networking needs that many enterprises typically source from multiple vendors. Its portfolio includes content delivery, load balancing, DNS services, smart routing for traffic optimization, video streaming, web optimization, cache reserve, waiting room functionality for traffic spikes, and data localization tools. The company promotes a Secure Access Service Edge (SASE) platform that merges network services with Zero Trust security, delivered as network-as-a-service. Under this umbrella, it offers Magic WAN, Magic Transit, Magic Firewall, Cloudflare Network Interconnect, and Spectrum. Cloudflare also markets Zero Trust solutions such as Cloudflare Access and Gateway, remote browser isolation, a cloud access security broker, email security, and data loss prevention products, competing in crowded segments with numerous established cybersecurity and networking providers.
For developers, Cloudflare runs a serverless and edge-computing ecosystem that includes Workers AI, Vectorize, AI Gateway, Cloudflare Workers, Pages, R2 object storage, Workers KV, Durable Objects, D1, Hyperdrive, Stream, Images, and Calls. On the consumer side, it offers the 1.1.1.1 DNS resolver, the WARP virtual private network, and a domain registrar service. The company targets a broad customer base spanning technology, healthcare, financial services, consumer and retail, industrial, non-profit, and government entities, competing against larger, more diversified cloud and security platforms.
Investor Outlook
With Cloudflare, Inc. (NET) carrying a D (Sell) Weiss Rating, investors may want to exercise caution and closely monitor how its risk/reward profile evolves relative to other Information Technology names. Watch for whether price action stabilizes or deteriorates further, and how sector sentiment and broader tech valuations impact the company's standing in our models. See full rankings of all D-rated Information Technology stocks inside the Weiss Stock Screener.
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