A Closer Look at Cloudflare’s (NET) Valuation Following Strategic Payment Partnerships and AI Commerce Protocol Launch

Cloudflare (NET) has teamed up with payment industry leaders Visa, Mastercard, and American Express to debut new protocols that secure AI-powered agentic commerce, a field where intelligent agents shop for consumers online. These protocols are being integrated into major payment platforms, drawing attention from investors eager to track the evolution of online payments in the era of artificial intelligence.

See our latest analysis for Cloudflare.

Momentum has been unmistakable for Cloudflare this year. Enthusiasm around its AI collaboration with payment giants is adding fresh fuel, and after a series of headline-making partnerships and conference appearances, the stock boasts a year-to-date share price return of 100%. Long-term shareholders have seen even greater rewards, with a 156% total return over the past year and 300% over three years. This reflects clear evidence of market conviction in Cloudflare’s growth story.

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But with the stock already delivering exceptional returns and surging on AI-driven momentum, is Cloudflare undervalued at current levels? Or is all of its future growth priced in, leaving little room for new buyers?

Most Popular Narrative: 8% Overvalued

Cloudflare’s current share price of $225.11 stands above the narrative’s fair value of $209.01, pointing to an optimistic market. This valuation, shaped by a consensus of analyst forecasts, is based on high expectations for growth and improved profitability over the next several years.

Ongoing expansion and cross-selling of Cloudflare’s platform, especially through high-value pool-of-funds and multi-product deals, have led to increasing penetration into large enterprises. This has resulted in all-time-high net sales productivity and a rising proportion of revenue from large customers. These trends are expected to accelerate both revenue and earnings growth.

Read the complete narrative.

Want to know the foundation behind this aggressive price? The core factor here is a future earnings transformation, driven by leveraged enterprise deals and ambitious revenue targets. Which specific growth projections and profit multiplying assumptions power this bold outlook? Discover the full breakdown and see if the narrative numbers align with your own expectations.

Result: Fair Value of $209.01 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, ongoing regulatory shifts and heavy reliance on large enterprise customers could quickly challenge Cloudflare’s growth expectations and future earnings outlook.

Find out about the key risks to this Cloudflare narrative.

Build Your Own Cloudflare Narrative

If you want to dig into the numbers, challenge the consensus, or tailor a perspective to your own research, you can build your own in just a few minutes. Do it your way.

A great starting point for your Cloudflare research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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