RBC Capital analysts increased their price target for Cloudflare Inc. (NYSE:NET) to $123 from $99, maintaining an Outperform rating on the stock. The revision reflects confidence in the company’s growth trajectory and its innovative approach to enhancing internet performance, security, and reliability.
Cloudflare’s mission to build a better internet is supported by its cloud-based, multi-tenant SaaS platform, which provides businesses with scalable, user-friendly solutions for critical applications and web properties. These services are powered by a global network of commodity hardware and proprietary software that runs Cloudflare’s full code stack in every city where it operates. This infrastructure allows for cost-effective free-tier offerings and enables developers to create globally scalable serverless applications without the burden of managing infrastructure.
The analyst’s $123 price target is based on a 21x EV/Sales multiple applied to Cloudflare’s 2025 revenue estimate, representing a slight premium to its peers growing at 30% or more annually. This valuation reflects Cloudflare’s attractive growth opportunities, its ability to scale margins, and the potential for the company to outperform expectations. While the valuation is above its peers, the premium is justified by its market leadership and robust innovation pipeline.