Close-up of the Cloudflare logo on a glass entryway, San Francisco, California, March 18, 2025. (Photo by Smith Collection/Gado/Getty Images)
Gado via Getty Images
Cloudflare (NYSE: NET)’s stock increased by 54%, in the past nine months, driven not only by a significant rise in revenue and improved valuations but also by a series of impressive earnings surprises, new partnerships, and a surge in optimistic analyst outlooks. Let’s explore the main factors behind this substantial market gain.
Below is a detailed analysis of the stock’s movement categorized into key contributing metrics.
So what’s going on here? The stock price rose by 54%, driven largely by a 21% increase in revenue and a 30% increase in the valuation multiple. Let’s take a closer look at the pivotal events responsible for these changes.
Here Is Why Cloudflare Stock Moved
- Strong Q3 2025 Earnings: Cloudflare reported impressive Q3 2025 revenue growth of 31% along with an EPS beat, which increased the stock by 13.84%.
- Q1 2025 Earnings Match: The Q1 2025 earnings met EPS expectations, leading to a 6.46% rise in the stock price.
- New Products & Partners: The introduction of the Cloudforce One security suite and partnerships with Visa/Mastercard raised market sentiment.
- Analyst Sentiment: Analysts have maintained a ‘Buy’ consensus, although concerns regarding profitability and high valuation were mentioned.
- Q2 2025 Earnings Reaction: Despite an EPS beat for Q2 2025, the stock price declined by 3.65% following the announcement.
Our Current Assessment Of NET Stock
Opinion: At present, we consider NET stock to be relatively overpriced. Why is that? Check out the full story. Read Buy or Sell NET Stock to understand what informs our current evaluation.
Risk: To truly grasp the risk, consider how much NET declined during significant market disruptions. It fell approximately 32% during the Covid pandemic and experienced a steeper drop of about 83% during the inflation shock. Even with a multitude of positive growth narratives, the potential downside during crises can be severe. Quality and fundamentals are essential, but when markets fluctuate, steep declines like these reveal that few stocks are genuinely secure.
While NET stock may have experienced a substantial rise recently, investing in a single stock without comprehensive and meticulous analysis can be perilous. The Trefis High Quality (HQ) Portfolio, featuring a selection of 30 stocks, has a proven record of comfortably outperforming its benchmark, which includes all three — the S&P 500, S&P mid-cap, and Russell 2000 indices. What accounts for this? Collectively, HQ Portfolio stocks have provided superior returns with reduced risk compared to the benchmark index; resulting in a smoother ride, as seen in HQ Portfolio performance metrics.