Cloudflare Stock Is Still Way Too Expensive
Edge computing leader Cloudflare (NYSE: NET) reported solid second-quarter results on Thursday, with enough good news to send the stock flying. Revenue rose 32% year over year to $308.5 million, and the company reported positive adjusted operating income and free cash flow. Cloudflare struggled with sales force execution issues earlier this year, and while those problems aren't completely solved, the company has made good progress.
While Cloudflare is getting better at navigating the uncertain economic environment, the stock is priced for something close to perfection. Cloudflare is a great company with incredible long-term growth potential, but investors need to be careful with this frothy stock.
The big problem Cloudflare faced to start 2023 was a sales organization suffering from lackluster productivity. With the economic picture darkening, potential and existing customers started to need more convincing to adopt Cloudflare's products. The sales team also had to contend with selling a platform that has become increasingly complex. Cloudflare relentlessly launches new products, which is a gift and a curse.
Source Fool.com
