Cloudflare Inc. (NET) PT Lowered to $76 at UBS
UBS analyst Roger Boyd lowered the price target on Cloudflare Inc. (NYSE: NET) to $76.00 (from $88.00) while maintaining a Sell rating.
The analyst comments "1Q results were generally positive with an ~average 1.4% topline beat and healthy margin beats (OpM of 11.2%, +450bps y/y), but NET once again downticked on the macro environment and derisked 2H guidance, pointing to negative signals particularly as it relates to geopolitical tension. While the cautious outlook is fair, we have difficulty squaring this with more positive commentary around security demand, pipeline generation, sales cycles and enterprise momentum. It sounds like to some extent the more conservative 2H outlook is also embedding some conservative expectations for GTM disruption in light of recent leadership changes. At 16x CY24E EV/S on AH pricing, we don't view the valuation as compelling, with the lowered guidance for ~25% growth in 4Q limiting the potential for 30%+ topline growth in CY24 and potentially CY25."