3. Cloudflare, Inc. (NYSE:NET)
Number of Hedge Fund Holders: 44
YTD Decline in Share Price as of June 8: 56.44%
Cloudflare, Inc. (NYSE:NET) is a California-based cloud services provider that delivers cloud-based security, content and performance solutions, reliability and internal infrastructure solutions, and developer-based solutions to technology, healthcare, financial services, consumer and retail, non-profit, and government clients.
Cloudflare, Inc. (NYSE:NET) stock has declined over 56% YTD as of June 8. The company’s Q1 revenue of $212.17 million topped analysts’ consensus estimates by $6.51 million, rising more than 50% for the 7th quarter in a row. The Q1 report points towards ongoing strength in cloud migration as well, making the stock a significant long-term play. At the end of May, the company also joined the European Union’s Cloud Code of Conduct General Assembly, further strengthening its future prospects.
Jefferies analyst Brent Thill on May 23 maintained a Hold rating on Cloudflare, Inc. (NYSE:NET) but lowered the price target on Cloudflare, Inc. (NYSE:NET) to $55 from $75, citing challenging macro headwinds and the threat of recession.
Among the hedge funds tracked by Insider Monkey, D E Shaw held a prominent stake in Cloudflare, Inc. (NYSE:NET) at the end of Q1 2022, comprising 1.5 million shares worth $184 million. Overall, 44 hedge funds were bullish on the stock at the end of March.
Here is what Baron Fifth Avenue Growth Fund has to say about Cloudflare, Inc. (NYSE:NET) in its Q1 2022 investor letter:
“Cloudflare, Inc., another new purchase during the quarter, is a web infrastructure and website security provider. Cloudflare disrupts legacy networking vendors by enabling customers to rent their network solutions in the cloud (and pay for usage) instead of buying firewalls, load balancers and secure web gateway devices. Using a global network in over 100 countries, Cloudflare delivers content and security within 50 milliseconds of 95% of the internet-connected population in the world. Shares contributed 12bps to results on impressive fourth quarter earnings as it continues to successfully layer high-value services such as zero trust, network services, and edge programmability on top of its modern global network. The company is attracting a broader set of investors as Cloudflare now matches durable 50%-plus top-line growth (this was the fifth straight quarter of 50%-plus revenue growth, and 56% current bookings growth suggests strong durability into 2022) with positive operating margins and break-even free cash flow. We believe that Cloudflare will benefit from long-duration growth disrupting a $100 billion addressable market across application services, network services, and zero-trust services.”
