Cloudflare

0.07 (0.42%)

NYSE:NET | Last traded on 11-15-2019 4:02 PM

Market Reaction

Offer Price

$15

Today Open Price

$16.75

Change Since IPO

Market Cap

$5B

Day High

$17.12

Day Low

$16.64

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Featured Analysis

"Our base case valuation of Cloudflare is $16.30 per share or a market cap of $4.8 billion. This would represent a 36% upside to the initial valuation of $3.5 billion that the company is seeking (at $12 per share). As such, we believe the Cloudflare IPO provides an attractive upside to the initial IPO price range. Our base case valuation of $4.8 billion assumes applying a 12.2x P/S multiple on our estimated sales of $391 million in 2020. The 12.2x P/S multiple represents a 10% discount to the average P/S multiple of the peers but slightly above the comps' median P/S multiple of 11.5x in 2020. We estimate Cloudflare to generate revenue of $282.6 million (up 46.7% YoY) in 2019 and $390.6 million (up 38.2% YoY in 2020). We also estimate the company to generate an operating loss of $24.6 million in 2019 and an operating profit of $7 million in 2020." - Douglas Kim, SmartKarma

Company Data

Location

San Francisco, CA

Valuation

$603.7M

-

Founded

2009

Total Shares Offered

40,250,000

-

Employees

1069

IPO Date

2019-09-12

Background Information

Cloudflare has built a global cloud platform that delivers a broad range of network services to businesses of all sizes and in all geographies—making them more secure, enhancing the performance of their business-critical applications, and eliminating the cost and complexity of managing individual network hardware. Their platform serves as a scalable, easy-to-use, unified control plane to deliver security, performance, and reliability across on-premise, hybrid, cloud, and software-as-a-service (SaaS) applications. Today, approximately 10% of the Fortune 1,000 are paying Cloudflare customers. Additionally, across the broader Internet, approximately 10% of the top million, 17% of the top 100,000, and 18% of the top 10,000 websites use at least one product on the Cloudflare platform on a paid or free basis.

Financial Analysis

Years 2016 2017 2018
Revenue growth -- 59% 43%
Net profit margin -20%-8%-45%
Valuation -- -- $4.1B
Revenue multiple -- -- 21x
Profit multiple -----47x

Financial Information

Income Statement ($M) 20162017 2018
Revenue85135193
Cost of goods sold242944
Gross profit61106149
Total operating expense78116234
EBIT(17)(10)(85)
Pretax profit(17)(10)(86)
Net income(17)(11)(87)
Balance Sheet ($M) 20162017 2018
Total current assets92197
Cash and cash equivalents2425
Total assets163298
Total current liabilities2761
Total liabilities4180
Total shareholder equity60114
Total liabilities and equity163298
Cash Flow Statement ($M) 201620172018
Net cash from operating activities(13) 3(43)
Net cash from investing activities(15) 10(121)
Net cash from financing activities0.42 (0.15)169
Net increase in cash and cash equivalents(28) 135