Although shares of Cloudflare Inc NET have appreciated by around 300% year to date, the stock may be interesting for high-growth software investors, according to KeyBanc Capital Markets.
The Cloudflare Analyst: Alex Kurtz initiated coverage of Cloudflare with an Overweight rating and a price target of $87.
The Cloudflare Thesis: The company is commencing “a multiyear campaign to reinvent core Infrastructure as a Service” and its platform could over time address a market size of $69 billion, Kurtz said in the note.
He added that Cloudflare’s serverless Workers product is likely to become a core competitor to Amazon.com, Inc’s AMZN AWS Lambda.
“We expect Cloudflare will be approaching $424M in revenue in CY20 (+48% y/y) and on pace to top $800M in ARR by 4Q22 driven to date by building a scalable global network that can enable G2Ks to quickly deploy Firewalls/DNS/DDoS servers as a Service and Load-Balancing as a Service (these products have helped drive customer count from 35K in CY16 to 103K in our 4Q20 estimate),” the analyst wrote.
NET Price Action: Shares of Cloudflare declined by 4.5% to $71.70 at the time of publication Tuesday.
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