Cloudflare, Inc. (NYSE:NET) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. On 31 December 2024, the US$49b market-cap company posted a loss of US$79m for its most recent financial year. As path to profitability is the topic on Cloudflare's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Cloudflare

Cloudflare is bordering on breakeven, according to the 33 American IT analysts. They expect the company to post a final loss in 2026, before turning a profit of US$12m in 2027. Therefore, the company is expected to breakeven roughly 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2027? Working backwards from analyst estimates, it turns out that they expect the company to grow 32% year-on-year, on average, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Cloudflare given that this is a high-level summary, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we would like to bring into light with Cloudflare is its debt-to-equity ratio of 123%. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.

Next Steps:

There are too many aspects of Cloudflare to cover in one brief article, but the key fundamentals for the company can all be found in one place – Cloudflare's company page on Simply Wall St. We've also put together a list of important factors you should look at:

1. Valuation: What is Cloudflare worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Cloudflare is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Cloudflare’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.