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While the sentiment among the brokerages is broadly positive about Cloudflare’s business and its prospects, the consensus is that the lower price targets reflect cuts in peer multiples.
Shares of Cloudflare Inc. (NET) fell nearly 5% in Thursday’s regular trading session amid a flurry of price target cuts following the company’s investor day event.
According to The Fly, analysts at Piper Sandler, Mizuho, Needham, RBC Capital, and Goldman Sachs have trimmed their price targets for the Cloudflare stock.
While the sentiment among the brokerages is broadly positive about Cloudflare’s business and its prospects, the consensus is that the lower price targets reflect cuts in peer multiples.
Piper Sandler maintained its ‘Neutral’ rating on the stock while cutting the price target to $131 from $153, implying an upside of 15% from Thursday’s closing price.
The brokerage added that while it thinks Cloudflare is a winner in the long term, it is staying on the sidelines due to the high expectations and valuation of the company.
Needham had the most significant price cut, trimming it to $145 from $185, despite maintaining a ‘Buy’ rating on the stock.
This is also closer to the consensus price target of $144.02, according to FinChat data.
Of the 35 brokerage calls for Cloudflare, eight have a ‘Buy’ and six have an ‘Outperform’ rating. There are 18 ‘Hold,’ two ‘Underperform,’ and one ‘Sell’ rating.
However, retail sentiment on Stocktwits remained in the ‘bullish’ (59/100) territory, with message volumes at ‘high’ levels.
In contrast, One user said that it looks like the “bubble” around Cloudflare has “popped.”
Cloudflare’s stock has plunged nearly 32% since its fourth-quarter earnings despite beating Wall Street expectations and garnering multiple price target hikes.
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