Why Barchart Data Says You Shouldn’t Chase Cloudflare Stock Here Despite Strong Technical Momentum

• Cloudflare (NET) demonstrates strong technical momentum, with shares up more than 40% over the past year.
• Consensus price targets cluster around $350, implying 10% upside from recent levels.
• Revenue and earnings are projected to grow robustly, but valuation concerns persist as NET remains unprofitable.
• Analyst sentiment is mixed, with both “Strong Buy” and “Strong Sell” ratings. Current levels favor holding over new entry.

Today’s Featured Stock

Valued at $111 billion, Cloudflare (NET) operates a cloud-based platform that provides a range of network services. Its offerings include security, improved performance, and reliability, and replace the need for hardware. Businesses of all sizes utilize the platform.

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals and superior current momentum. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. NET checks those boxes. The Trend Seeker issued a new “Buy” signal on Sept. 9. 

Barchart’s Technical Indicators for Cloudflare

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Cloudflare scored an all-time high of $332.22 on August 10.

• Cloudflare has a Weighted Alpha of 60.92.
• NET has a 100% “Buy” opinion from Barchart.
• The stock has gained 41.09% over the past 52 weeks.
• Cloudflare has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $312 with a 50-day moving average of $283.91.
• NET had  3 highs and gained 1.29% in the last month.
• 60-month beta of 1.66.
• Relative Strength Index (RSI) is at 57.64.
• There’s a technical support level around $298.63.

Don’t Forget the Fundamentals

• $111 billion market capitalization.
• Revenue is projected to grow 32.46% this year and another 28.71% next year.
• Earnings are estimated to increase by 35.82% this year and an additional 32.69% next year.

Analyst and Investor Sentiment on Cloudflare

• The Wall Street analysts followed by Barchart give the stock 20 “Strong Buy,” 2 “Moderate Buy,” 8 “Hold,” and 2 “Strong Sell” opinions with price targets between $160 and $400.
• Value Line rates the stock “Below Average” and has a consensus price target of $350 for about a 10% gain.
• Morningstar thinks the stock is fairly valued.
• CFRA’s MarketScope rates the stock as “Buy” with a price target of $356.
• 79,600 investors are following the stock on Seeking Alpha, which rates it a “Hold.”
• TipRanks’ analysts’ price target is $348, also implying a roughly 10% gain.
• Short interest is 2.10% of the float with 1.42 days to cover the float.

The Bottom Line on Cloudflare

Analysts have a wide range of opinions on this stock with both “Strong Buys” and “Strong Sells” but it seems the consensus from most sites looks for a price target around $350 for a 10% gain. Short Interest is a low 2.10% of the float, but since the company has yet to turn a profit, there are valuation concerns. If you have it, hold it, but a potential 10% gain does not make this a great entry point.

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculate should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.

On the date of publication, Jim Van Meerten did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.