Cloudflare jumps after Citi upgrades, hikes PT by 50% to Street-high

• January 17, 2025

** Cloudflare's NET shares jump >5% early Fri after Citi upgraded to 'buy' from 'neutral', saying it has improved confidence in software firm's fundamentals and growth prospects

** NET shares rise as much as 5.4% to $121.02, highest levels since Apr 2022. Shares last up 3% at $118.26

** Citi hiked PT from $95 to Street-high $145, per LSEG, implying 26% upside to stock's last close

** Cloudflare enjoying high investor credibility with GenAI exposure given its relationship with Apple AAPL around the iPhone maker's Personal Cloud Compute and other AI focused initiatives, Citi said in note

** Citi said it has higher conviction in co's ability to deliver sustainable 27%-30% topline growth

** In its last report, Cloudflare forecasted Q4 rev below consensus, impacted by heightened competition in cybersecurity market

** Of 34 brokerages covering NET, recommendation breakdown is 16 "strong buy" or "buy", 15 "hold" and 3 "sell" or "strong sell" with median PT of $110 - LSEG

** With move on the session, NET shares up ~10% YTD and up ~50% in the past six months