Cloudflare experienced a 3% rise in share price over the past week. This increase coincides with the announcement of a strategic partnership with Rakuten Mobile, which aims to deliver managed Zero Trust security services to Japanese businesses, particularly small and medium-sized enterprises. This partnership aligns with the broader positive market movement, as the tech-focused Nasdaq Composite also experienced a 2% rise during the period. The collaboration might have added weight to Cloudflare's performance, amid a broader tech rally led by chipmakers and anticipation of positive earnings across the sector.

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Cloudflare's shares have appreciated a substantial 374.35% over the past five years, underscoring a significant increase when compared to its recent short-term movements. Over the last year, Cloudflare exceeded the US IT industry's 1-year return of 7.8% and the broader US market's 5.9% return, highlighting its strong performance.

The strategic alliance with Rakuten Mobile in the short term could enhance revenue streams and bolster earnings forecasts, as the partnership addresses security needs for Japanese businesses. Cloudflare's recent price movement, peaking at a 3% weekly rise, positions its shares at a 23.82% discount relative to the analyst consensus price target of US$139.67.

Our valuation report unveils the possibility Cloudflare's shares may be trading at a premium.

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.

Companies discussed in this article include NYSE:NET.

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