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. The US$34b market-cap company announced a latest loss of US$79m on 31 December 2024 for its most recent financial year result. The most pressing concern for investors is Cloudflare's path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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Consensus from 34 of the American IT analysts is that Cloudflare is on the verge of breakeven. They anticipate the company to incur a final loss in 2026, before generating positive profits of US$15m in 2027. So, the company is predicted to breakeven approximately 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 31%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Cloudflare's upcoming projects, though, bear in mind that typically a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Cloudflare

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. A higher level of debt requires more stringent capital management which 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 compiled a list of important aspects 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.