It might be of some concern to shareholders to see the Cloudflare, Inc. (NYSE:NET) share price down 21% in the last month. But over five years returns have been remarkably great. In fact, during that period, the share price climbed 377%. Impressive! So we don't think the recent decline in the share price means its story is a sad one. But the real question is whether the business fundamentals can improve over the long term.

Although Cloudflare has shed US$1.5b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Cloudflare isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

For the last half decade, Cloudflare can boast revenue growth at a rate of 33% per year. That's well above most pre-profit companies. Arguably, this is well and truly reflected in the strong share price gain of 37%(per year) over the same period. It's never too late to start following a top notch stock like Cloudflare, since some long term winners go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Cloudflare is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Cloudflare in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that Cloudflare shareholders have received a total shareholder return of 19% over one year. However, the TSR over five years, coming in at 37% per year, is even more impressive. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. It's always interesting to track share price performance over the longer term. But to understand Cloudflare better, we need to consider many other factors. Even so, be aware that Cloudflare is showing 1 warning sign in our investment analysis , you should know about...

We will like Cloudflare better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.