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Cloudflare - AI Stock Analysis

Analysis generated April 24, 2025

Cloudflare, Inc. is a web infrastructure and website security company that provides content delivery network (CDN) services, internet security, and distributed domain-name-server services. The company was founded in 2009 and has since become a significant player in the web security and edge computing space. Cloudflare's services span a wide range of internet functionalities, offering performance improvements, enhanced security against malicious attacks, and reliability for internet properties of all sizes.

Fundamental Analysis

In examining Cloudflare's financial health, the revenue for the last quarter was $460 million, marking a 6.94% increase compared to the previous quarter. Looking year over year, there is a 26.89% increase in revenue, indicative of stable growth. Net income also shows promising signs, as the latest figures illustrate a net income of $13 million, a 16.20% increase quarter over quarter, and an impressive 53.89% increase year over year. EBITDA stands at $27 million, growing by 32.13% from the previous quarter and 134.73% from the same quarter last year.

These figures demonstrate strong financial growth, underlined by consistent year-over-year improvements across multiple metrics. However, it is worth noting that there have been several instances of company insiders selling their stock. While insider selling may be concerning, it is essential to consider other underlying factors before making a judgment.

Technical Analysis

The current stock price of Cloudflare stands at $118.81, which reflects a 4.13% decrease compared to a month ago. On the upside, the stock has grown by 36.94% from the same period last year, suggesting a positive long-term outlook. The trend remains bullish, bolstered by the current Simple Moving Average over 10 days (SMA10) being $109.08, higher than the previous SMA10 of $107.91, indicating potential upward momentum in price movement. Moreover, the Relative Strength Index (RSI) is at 22.2, suggesting that the stock is in an oversold condition and could signify a buying opportunity.

Alternative Data Analysis

Alternative data also provide valuable insights into Cloudflare's potential. The company has 404 open positions, a number that has increased by 39% in the last few months, indicating an expanding workforce and potentially more significant future growth. Employee sentiment towards the business outlook is rated as neutral.

Analyzing customer acquisition data reveals that Cloudflare's website receives an estimated 50 million visitors, although this number has declined by 11% over the last few months, raising some concerns about customer retention. Conversely, mobile app downloads are up by 49%, with approximately 70,000 downloads per day, signifying strong growth in mobile user acquisition. Cloudflare's social media presence also shows positive trends, with Instagram followers increasing by 8% to 45,000 and a stable Twitter following of 220,000. Lastly, the AltIndex's AI score for Cloudflare is 71, which indicates a buy signal based on a comprehensive evaluation of all available data.

Conclusion and Recommendation

Cloudflare presents a compelling investment opportunity. The financials underscore robust growth, particularly in revenue, net income, and EBITDA, confirming long-term upward momentum. While the short-term technical indicators show minor setbacks, the longer-term outlook remains bullish with supportive SMA trends and RSI suggesting an oversold condition.

The increase in job openings and the strong growth in mobile app downloads emphasize that Cloudflare is expanding and likely to continue capturing market share. Despite some concerns about declining website visitors, overall alternative data metrics are primarily positive, reinforcing the growth narrative. In conclusion, considering the multiple indicators and data points, Cloudflare is a promising stock with a favorable outlook.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.