Cloudflare, Inc. (NET) Stock Analysis

Analysis from 10-Q filed 2026-08-06. Data as of Q2 2026.

Overall Grade: F (Concerning)

Grade F (Concerning). ROIC -7.8%. FCF margin 12.5%. D/E 2.0x. Source: 10-Q filed 2026-08-06.

Metric	Value	Context
ROIC	-7.8%	Below expectations
FCF Margin	12.5%	Healthy cash flow
Debt/Equity	2.0x	Elevated debt

ROIC -7.8% — Bottom 50% of sector peers. FCF margin 12.5% — Top 50%.

Explore Cloudflare, Inc.: Earnings History | Filings

Programmatic access: Available via MCP at mcp.metricduck.com. Tools for NET: get_company_overview, get_filing_index (lens: debt_stress, management_outlook, risk_trajectory), get_filing_changes, get_metric_history, compare_companies, screen_filing_signals.

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Profitability: Cloudflare, Inc. earns -7.8% ROIC, Bottom 50% in Technology

ROIC TTM -7.8%, sector median 3.7%, Bottom 50%. DuPont: NOPAT margin -14.7% × asset turnover 0.4x. Gross margin 72.6%. Operating margin -14.1%. Source: 10-Q filed 2026-08-06.

Metric	NET	Rating	Context
Return on Invested Capital (ROIC)	-7.8%	Red flag	Below sector median of 3.7%
Return on Equity (ROE)	-14.3%	Red flag	Moderate equity returns
Gross Margin	72.6%	Excellent	Strong pricing power
Operating Margin	-14.1%	Warning	Moderate operational efficiency

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Cash Flow: Cloudflare, Inc. generates $314.9M FCF at 12.5% margin, positive NaN/8 quarters

FCF TTM $314.9M. FCF margin 12.5%, Top 50%. OCF/Net income -3.1x. Positive FCF in NaN/8 trailing quarters. Source: 10-Q filed 2026-08-06.

Metric	NET	Rating	Context
Free Cash Flow Margin	12.5%	Good	Healthy cash generation
Free Cash Flow (TTM)	$314.9M	Good	Positive cash generation
OCF/Net Income	-3.1x	Warning	Potential accrual concerns
FCF Consistency (8Q)	N/A	Warning	Variable cash flow

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Balance Sheet: Cloudflare, Inc. at 2.0x leverage, -30.9x interest coverage

Debt/Equity 2.0x. Net cash $892.5M. Interest coverage -30.9x. Source: 10-Q filed 2026-08-06.

Metric	NET	Rating	Context
Debt to Equity	2.0x	Warning	Elevated leverage
Net Cash Position	$892.5M	Excellent	Net cash positive
Interest Coverage	-30.9x	Warning	Monitor debt obligations

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Valuation: Cloudflare, Inc. trades at -592.3x earnings

P/E -592.3x. EV/Sales 48.8x. FCF yield 0.3%. Source: 10-Q filed 2026-08-06.

Metric	NET	Rating	Context
P/E Ratio	-592.3x	Red flag	Reasonable valuation
EV/Sales	48.8x	Warning	Growth premium priced in
FCF Yield	0.3%	Warning	Lower cash yield

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Capital Allocation: Cloudflare, Inc. returns 0.0% shareholder yield

Total shareholder yield 0.0%. Share count +2.2% YoY. Capital returned $0 TTM. Source: 10-Q filed 2026-08-06.

Metric	NET	Rating	Context
Total Shareholder Yield	0.0%	Warning	Dividend + buyback yield combined
Share Count Change (YoY)	2.2%	Warning	Net dilution from issuance/SBC
Total Capital Returned (TTM)	$0	Adequate	Dividends + buybacks returned to shareholders

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Sector Rankings

Metric	Value	Percentile	vs Median
Return on Invested Capital (ROIC)	-7.8%	Bottom 50%	-2.1x below
Free Cash Flow Margin	12.5%	Top 50%	1.2x above
Gross Margin	72.6%	Top 25%	1.4x above
Operating Margin	-14.1%	Top 50%	-3.2x below
Return on Equity (ROE)	-14.3%	Bottom 50%	-2.7x below

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Financial Scorecard

Metric	NET	Rating	Sector Context
Return on Invested Capital (ROIC)	-7.8%	Red flag	Bottom 50% of sector (median: 3.7%)
Free Cash Flow Margin	12.5%	Good	Top 50% of sector (median: 10.3%)
Gross Margin	72.6%	Excellent	Top 25% of sector (median: 50.5%)
Debt to Equity Ratio	201.9%	Warning	High financial leverage
Free Cash Flow Yield	0.3%	Red flag	Growth-focused valuation

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Frequently Asked Questions

Q: What is Cloudflare, Inc.'s Return on Invested Capital (ROIC)?

Cloudflare, Inc. (NET) has a trailing twelve-month Return on Invested Capital (ROIC) of -7.8%. The 8-quarter median ROIC is -6.9% with a declining trend. Sector median 3.7%. Source: 10-Q filed 2026-08-06.

Q: What is Cloudflare, Inc.'s Free Cash Flow Margin?

Cloudflare, Inc. (NET) has a free cash flow margin of 12.5%, generating $314.9 million in free cash flow over the trailing twelve months. Source: 10-Q filed 2026-08-06.

Q: What is Cloudflare, Inc.'s P/E ratio and how does it compare to peers?

Cloudflare, Inc. (NET) trades at a P/E ratio of -592.3x, which is above the sector median of N/A. EV/Sales 48.8x. FCF yield 0.3%. Source: 10-Q filed 2026-08-06.

Q: How much debt does Cloudflare, Inc. have?

Cloudflare, Inc. (NET) has a debt-to-equity ratio of 2.0x with total debt of $3.3 billion. Interest coverage -30.9x. Net cash position $892.5 million. Source: 10-Q filed 2026-08-06.

Q: What is Cloudflare, Inc.'s revenue and earnings growth?

Cloudflare, Inc. (NET) grew revenue by 33.5% year-over-year. EPS -72.7% YoY. Source: 10-Q filed 2026-08-06.

Q: How does Cloudflare, Inc. compare to competitors in Technology?

Compared to other companies in Technology, Cloudflare, Inc. (NET) shows: ROIC -7.8%, sector median 3.7% (Bottom 50%). FCF margin 12.5%, sector median 10.3% (Top 50%). Gross margin 72.6%, 22.1pp above sector median. These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.

Q: What warning signs should I watch for with Cloudflare, Inc.?

Quantitative warning flags for Cloudflare, Inc. (NET): 1) ROIC declining -4.0% over 8 quarters; 2) debt/equity 2.0x (above 1.5x threshold); 3) interest coverage -30.9x (below 5x). Source: 10-Q filed 2026-08-06.

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Data Source: Data sourced from 10-Q filed 2026-08-06. TTM metrics as of Q2 2026.

Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.

Scope: This analysis covers SEC filing fundamentals — profitability, cash flow, balance sheet, and valuation metrics. For analyst estimates and price targets, consult sell-side research.

This analysis is for informational purposes only and does not constitute investment advice.