Cloudflare (NYSE:NET) Maintains "Buy" Rating from Needham

• Cloudflare's Q1 revenue of $479 million exceeded estimates, showcasing its robust performance in the tech industry.
• The company secured a significant contract worth over $100 million, emphasizing its competitive edge and growth potential.
• Despite mixed financial results, Cloudflare's positive outlook and market presence are affirmed by Needham's "Buy" rating.

On May 9, 2025, Needham maintained its "Buy" grade for Cloudflare (NYSE:NET), with the stock priced at $133.03. Cloudflare is a prominent company in the tech industry, known for providing a range of services that enhance the security, performance, and reliability of internet properties. It competes with other tech giants like Akamai and Amazon Web Services in the cloud services sector.

Cloudflare's recent financial results for the first quarter show mixed outcomes. The company reported revenue of $479 million, surpassing the estimated $469 million. However, its adjusted earnings per share (EPS) were slightly below expectations, at 16 cents compared to the anticipated 17 cents. Despite this, CEO Matthew Prince expressed confidence, highlighting a significant contract valued at over $100 million, driven by their Workers developer platform.

Looking ahead, Cloudflare projects second-quarter revenue between $500 million and $501 million, aligning closely with the estimated $500.34 million. The company expects adjusted earnings of 18 cents per share, slightly below the forecasted 19 cents. For the full year 2025, Cloudflare reaffirmed its guidance, anticipating revenue between $2.09 billion and $2.094 billion, with adjusted EPS ranging from 79 to 80 cents, compared to the estimated 80 cents.

Following the announcement of its financial results, Cloudflare's shares rose by 2.1%, closing at $124.30. The stock for NYSE:NET is currently priced at $133.08, reflecting an increase of 7.05% or $8.77. Today, the stock has fluctuated between a low of $130.61 and a high of $136.39. Over the past year, NET has reached a high of $177.37 and a low of $66.24.

Cloudflare's market capitalization stands at approximately $46.19 billion, with a trading volume of 5.86 million shares on the NYSE. The company's ability to secure large contracts and maintain a strong market presence contributes to its positive outlook, as highlighted by Needham's "Buy" rating.