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Cloudflare, Inc.

NYSE · Technology
Cloudflare, Inc.
NET · Software - Infrastructure
$223.04
▲ 5.54 (2.55%)
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Insufficient data to generate a complete Graham analysis.
Overall Grade
D
Defensive
C
Enterprising
Profitability F
Gross Profit Margin 74.5%
Operating Margin -9.6%
Net Income Margin -4.7%
Fin. Health C
Years to Pay Off Debt -34.4 yrs
Working Capital vs Long-Term Debt $320M
Working Capital $2.3B
Valuation F
Price-to-Book 48.81x
Cash Flow A
Free Cash Flow $261M
Owner Earnings $430M
1/6
Graham Score
Speculative
Defensive — Graham's strict criteria (P/B, P/E, dividends, stability)  ·  Enterprising — Profitability & cash flow focused, accepts higher valuations for quality
Metric Explanations
What each dimension measures and where the thresholds come from.
Gross Profit Margin
Revenue minus cost of goods sold. Graham's ≥40% threshold identifies businesses with durable pricing power. Note: software and financial companies naturally exceed this; retailers and manufacturers rarely reach it due to their cost structures.
Operating Margin
Profit after operating costs before interest and taxes. A consistent ≥15% operating margin signals a business with real competitive advantages. Capital-intensive industries (airlines, auto, commodities) rarely hit this threshold due to their structural cost base — compare within industry for context.
Net Income Margin
Bottom-line profit as a percentage of revenue. The ≥20% target reflects Buffett's preference for highly profitable businesses. Financial engineering (buybacks, tax optimisation) can inflate this temporarily — look for consistency across multiple years rather than a single strong result.
Years to Pay Off Debt
Total Debt ÷ Net Income. Lower = stronger balance sheet. Important caveat: utilities, telecoms, REITs, and infrastructure companies carry large structural debt by design — their bond-like cash flows service it comfortably at ratios that would alarm Graham. Compare within sector.
Working Capital vs Long-Term Debt
Working Capital minus Long-Term Debt. Negative results are common and expected in capital-return-focused businesses like Apple, Domino's, and McDonald's — where aggressive buybacks and dividends intentionally reduce book equity. This does not indicate financial distress in high-FCF businesses.
Working Capital
Current Assets minus Current Liabilities. Negative working capital can be a deliberate efficiency strategy in businesses that collect cash before paying suppliers (retailers, fast food franchises, subscription businesses). Assess alongside free cash flow generation for full context.
Price-to-Book
Market price vs book value per share. Rarely below 1.5x for quality businesses today. Intangible assets (brand, software, patents) don't appear on the balance sheet under accounting rules, making P/B artificially high for asset-light companies. Negative P/B indicates book equity has been reduced by buybacks — common in highly profitable capital-return businesses.
Free Cash Flow
Operating cash flow minus capital expenditures. Buffett's most important metric — cash a business actually generates for its owners after maintaining and growing its asset base. Consistently positive FCF is one of the strongest indicators of a durable, well-run business regardless of accounting profits.
Owner Earnings
Net Income + Depreciation & Amortisation − Capital Expenditures. Buffett's preferred measure of a company's true annual earning power — what could theoretically be distributed to owners without impairing the business. More reliable than reported EPS because it accounts for the capital cost of maintaining the business.
Market Data
Market Cap $78.8B
Enterprise Value $76.0B
P/E (TTM) 154.71
Dividend Yield N/A
Exchange NYSE
Key Margins
Gross Profit 74.5%
Operating Margin -9.6%
Net Margin -4.7%
Company Info
Sector Technology
Industry Software - Infrastructure
Employees 5156
Country United States
Visit website
About Cloudflare, Inc.

Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides a cloud-based security solution to secure a range of combination of platforms, including public and private cloud, on-premises, software-as-a-service applications, and Internet of things (IoT) devices; and application security products comprising web application firewall, bot management, distributed denial of service mitigation, API security, SSL/TLS encryption, client-side security, and security center products. It also offers application performance solutions, such as content delivery, load balancing, DNS, smart shield, video stream delivery, web optimization, cloudfare waiting room, and cloudfare data localization suite; SASE platform that combines network services and Zero Trust and workplace security products that provides a cloud-based network and security-as-a-service; network services, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust security services which include cloudflare zero trust network access, secure web gateway, and one client; and remote browser isolation, cloud access security broker, cloud email security, digital experience monitoring, and data loss prevention products. Further, it provides developer-based solutions comprising workers AI, vectorize, AI gateway, cloudflare workers, cloudflare pages, R2 object storage, workers KV, durable objects, D1, hyperdrive, queues, cloudfare stream, cloudfare images, and cloudflare realtime; and consumer offerings, such as 1.1.1.1 DNS and with WARPm and cloudfare registrar that offers secure registration and management of domain names. The company serves customers in technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. The company was incorporated in 2009 and is headquartered in San Francisco, California.

Showing Key Metrics
Income Highlights
Metric 2025 2024 2023 2022 2021
Gross Profit % 74.5% ▼ 77.3% 76.3% 76.1% N/A
Operating Margin % -9.6% ▼ -9.3% -14.3% -20.6% N/A
Net Income % -4.7% ▲ -4.7% -14.2% -19.8% N/A
Diluted EPS -0.29 ▼ -0.23 -0.55 -0.59 N/A
Balance Sheet Highlights
Metric 2025 2024 2023 2022 2021
Total Assets $6.0B $3.3B $2.8B $2.6B N/A
Total Debt $3.5B ↑ $1.5B $1.4B $1.6B N/A
Working Capital $2.3B ▲ $1.5B $1.4B $1.5B N/A
Years to Pay Debt -34.40 -18.57 -7.80 -8.16 N/A
Cash Flow Highlights
Metric 2025 2024 2023 2022 2021
Free Cash Flow $261M ▲ $167M $119M -$40M N/A
Owner Earnings $430M $262M $87M $72M N/A
CapEx % of Net Income N/A N/A N/A N/A N/A
These metrics estimate what Cloudflare, Inc. is worth based on its fundamentals — independent of what the market currently prices it at. Graham's Fair Value and NCAV are conservative floors rooted in 1930s–60s principles. EPV assumes zero growth. None are price targets — they are reference points for judging whether the current price offers a margin of safety.
Graham's Fair Value
N/A (negative EPS)
Margin of Safety
—
Market Cap ÷ Company Value
2.35
P/B Ratio
48.81
Warren's Owner Earnings
$430M
Latest fiscal year
Graham's 7 Criteria
Defensive Investor Checklist
1/6 — Speculative Investor
✅ Adequate Size
$2.2B
vs > $1.5B revenue
❌ Strong Financial Condition
1.98x
vs Current Ratio > 2.0x
❌ Earnings Stability
4 loss years (4 yrs data)
vs No negative EPS years
❌ Dividend Record
No dividend
vs Uninterrupted dividends
❌ Moderate P/E Ratio
154.7x
vs P/E ≤ 15.0x
❌ Moderate Price-to-Book
48.81x P/B (P/E×P/B: 7550.7)
vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 7 Criteria — Explained
What each criterion measures and why it may or may not apply to modern businesses.
✅ Adequate Size — $2.2B vs > $1.5B revenue
Graham required companies large enough to withstand economic downturns. This threshold ($1.5B) is inflation-adjusted from Graham's original $100M — virtually all S&P 500 companies pass this today.
"The minimum size of an enterprise should be not less than $100 million of annual sales."
❌ Strong Financial Condition — 1.98x vs Current Ratio > 2.0x
Current assets must be at least twice current liabilities. Note: highly profitable companies (Apple, Domino's) often run negative or low working capital deliberately — they collect cash fast and stretch payables. A failing score here is not always a warning sign.
"For industrial companies, current assets should be at least twice current liabilities."
❌ Earnings Stability — 4 loss years (4 yrs data) vs No negative EPS years
Graham required uninterrupted positive earnings. Any loss year is a red flag for defensive investors. Growth companies and cyclicals may show occasional losses during investment cycles or downturns without being fundamentally unsound.
"The company should have shown no deficit in the past ten years."
❌ Dividend Record — No dividend vs Uninterrupted dividends
Graham valued dividends as evidence of financial discipline and shareholder alignment. Many excellent modern businesses (Alphabet, Amazon, Berkshire Hathaway) pay no dividend, preferring to reinvest cash at high rates of return. Failing this criterion does not indicate a poor business — it may indicate a high-growth one.
"Some current dividend payments — for at least the past 20 years."
❌ Moderate P/E Ratio — 154.7x vs P/E ≤ 15.0x
Graham's 15x P/E threshold was calibrated to 1960s market averages when interest rates were higher. Today's lower rate environment structurally supports higher multiples — the S&P 500 long-run average P/E is now closer to 20–25x. A stock trading at 20x is not automatically speculative in the modern context.
"The price-earnings ratio should be no more than 15 times average earnings."
❌ Moderate Price-to-Book — 48.81x P/B (P/E×P/B: 7550.7) vs P/B ≤ 1.5x | P/E × P/B ≤ 22.5
Graham's 1.5x P/B threshold made sense when most company value was tangible. Today, intangible assets — brand, software, patents, network effects — rarely appear on the balance sheet. A high P/B in tech, pharma, or consumer brands often reflects intangible value, not overvaluation. P/FCF or EV/EBITDA are more reliable for asset-light businesses.
"The price should not be more than 1½ times book value. P/E × P/B ≤ 22.5."
Net Current Asset Value
$0.21
Trading at 1051.8x NCAV. Expected for most quality businesses — NCAV was designed to find depression-era bargains and rarely applies to modern profitable companies.
"Buy at two-thirds of net current assets." — Graham
Earnings Power Value
$-7.21
Per share, no-growth floor. Compare to current price.
Cash Flow Analysis
Metric 2025 2024 2023 2022 2021
Capital Expenditure % of Net Income N/A N/A N/A N/A N/A
Repurchase of Capital Stock $0M $0M -$0M -$0M N/A
Free Cash Flow $261M ▲ $167M ▲ $119M ▲ -$40M • N/A •
Warren's Owner Earnings $430M $262M $87M $72M N/A
Peers & Industry
No auto-detected peers for Software - Infrastructure. You can manually compare NET against any stock using the Compare tool.
"The management of a business is its most important single factor — more important than market position, patents, or financial structure."
— Benjamin Graham
Capital Allocation & Alignment
Insider Ownership
0.73%
Low — management has little skin in the game
Return on Equity (ROE)
-7.0%
Weak — poor returns on equity
Return on Assets (ROA)
-1.7%
Poor — assets are not generating adequate returns
Debt Trend YoY
+140.5% YoY
Debt is growing — management is leveraging up
Leadership Team
Matthew Prince
Co-Founder, Co-Chairman & CEO
Age 50
Pay: $2,081,094
Michelle Zatlyn
Co-Founder, President & Co-Chair of the Board
Age 45
Pay: $1,360,459
Thomas Josef Seifert
Chief Financial Officer
Age 62
Pay: $741,667
Mark Anderson
President of Revenue
Age 63
Pay: $7,665
Philip Alan Winslow Jr., , Jr.
Vice President of Strategic Finance, Treasury and Investor Relations
Top Institutional Holders
Institution % Owned Shares
Capital World Investors 11.28% 35,825,517
Vanguard Group Inc 10.20% 32,407,646
Blackrock Inc. 7.13% 22,653,454
Morgan Stanley 5.67% 18,009,245
BAILLIE GIFFORD & CO 5.30% 16,823,947
JPMORGAN CHASE & CO 4.28% 13,607,106
FMR, LLC 4.01% 12,750,499
State Street Corporation 2.20% 6,988,989
Risk Analysis
Beta (Market Risk)
1.67
High volatility — moves more than the market
Short Interest
3.0% of float
Low short interest — market is not heavily bearish
Debt-to-Equity
2.41x
High leverage — significant financial risk
Current Ratio
1.98x
Adequate liquidity
52-Week Price Range
Low: $120.45 Current: $223.04 High: $260.00
Currently at 74% of 52-week range

Cloudflare, Inc. (NET) fundamental analysis — Overall grade D based on profitability, financial health, valuation and cash flow. Graham's Fair Value: N/A (negative EPS). Gross profit margin: 74.5%. Operating margin: -9.6%. Net margin: -4.7%. Market cap: $78.8B. Sector: Technology. Industry: Software - Infrastructure. Analysis powered by 360investing — free fundamental stock analysis based on Benjamin Graham and Warren Buffett principles.

Disclaimer: 360investing is provided for informational and educational purposes only and does not constitute financial, investment, legal, or tax advice. All data is sourced from public third-party providers and may be delayed, inaccurate, or incomplete. Past performance is not indicative of future results. Analysis, scores, and valuations are algorithmic and do not represent professional investment recommendations. Always conduct your own due diligence and consult a qualified financial adviser before making any investment decision. Use of this tool constitutes acceptance that 360investing and its operators bear no liability for decisions made based on information presented here.

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