Cloudflare Inc. Class A Common Stock (NET)

FairStock Score: 33/100 — RISKY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I wear two hats: Buffett's search for durable economics and Graham's insistence on margin of safety. Cloudflare sells cloud security and infrastructure services, and demand is clearly strong: revenue rose from $1.3B in FY2023 to $1.7B in FY2024 to $2.2B in FY2025, with 33.6% revenue growth. The latest filed quarter, fiscal Q2 2026 ended 2026-06-30, showed revenue of $696.1M but a net loss of $170.0M and a -24.42% margin. That loss widened from $22.9M in fiscal Q1 2026 and $50.4M in fiscal Q2 2025. Over the last four years the company has not earned a profit, which is why the FairStock Lynch category is none. Free cash flow is positive at $314.9M trailing twelve months, but at the 2026-10-13 close the FCF yield is only 0.3% on a $123.2B market cap. FairStock also shows P/E -599.48, P/B 76.42, EV/EBITDA 3233.72, ROE -14.43%, ROCE -2.04%, and D/E 2.18. The Piotroski F-Score is 5/9, and the Altman Z-Score is 15.40. A high-growth security platform can compound if it gains scale and pricing power, but I see no proven moat in the profit statement yet. At 76 times book and with no positive earnings, the price embeds heroic future outcomes. I would require evidence that losses are narrowing and cash generation is becoming material before calling this a value opportunity.

In plain English: Cloudflare sells cloud security and internet infrastructure services to businesses around the world. Revenue is growing quickly, but the company has lost money in each of the last four years and lost $170.0 million in the quarter ended 2026-06-30. At its closing price of $347.70 on 2026-10-13, the stock looks very expensive compared with profits and with the cash the business produces.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer