NET
Beat the numbers, lose the vibe
Cloudflare did the thing companies love to brag about: it beat first-quarter revenue expectations with $639.76 million and also topped adjusted EPS estimates at 25 cents. In a normal universe, that’s the kind of report that gets a polite standing ovation.
But valuation is the party pooper
Instead, NET got hit with a nasty selloff Friday, falling 22.4% to $199.26 as investors focused less on the beat and more on the price tag. Translation: the market still likes the story, but it’s demanding a discount that Cloudflare clearly doesn’t want to offer.
Goldman says the long game still looks good
Adding a little rocket fuel to the debate, Goldman Sachs analyst Gabriela Borges reiterated a Buy rating and lifted her price target from $250 to $266. Her case: Cloudflare keeps stacking growth across products, could benefit from rising agentic traffic demand, and may get a boost from AI inference workloads over time.
She also pointed to a broader shift away from old-school hardware firewalls and said Cloudflare’s network architecture gives it some real staying power. The only catch? The market is currently acting like it read that memo and replied, “cool story, what’s the multiple?”
Big picture: Cloudflare is still very much a growth-stock story, but Friday’s move says investors want the growth without paying as much for the privilege.