Stock fact sheet · data as of
Cloudflare, Inc. (NET): fair value, margin of safety and Wheel Score
Technology · Software - Infrastructure · United States · Speculative / Distressed
Is NET undervalued?
Cloudflare, Inc. (NET) closed at 316.13 on 16 Oct 2026, 1779% above the GLS average fair value of 16.82. 2 of the 2 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.
The average is built from just 2 models (DCF, 10 Cap) - the rest returned nothing because an input they need (dividends, free cash flow, book value) is zero or negative - so treat it with more caution than usual.
The nightly engine files NET under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.
Nine valuation models for NET
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 6.34 | -98% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | - | - | The most a defensive investor pays for the earnings and book value per share; no value tonight |
| Graham Growth | - | - | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields; no value tonight |
| Lynch | - | - | EPS × the earnings growth rate (PEG of 1), growth capped at 25%; no value tonight |
| GLS Growth | - | - | EPS compounded ten years at the blended growth rate, discounted back at 15% a year; no value tonight |
| 10 Cap | 27.30 | -91% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | - | - | Eight years of compounded free cash flow: the price at which the business pays for itself; no value tonight |
| DDM | - | - | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend; no value tonight |
| EPV | - | - | Earnings power value: current EPS capitalised at 9% with no growth; no value tonight |
| Zombie (liquidation) | 0.1901 | -100% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 333.24 | +5% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
Cloudflare, Inc. scores only 3 of 9 on the Piotroski F-score, which fails the Sunday Scan's "6 or more" rule. A reading this low means several of the basic tests - positive earnings, positive operating cash flow, falling debt, no new share issuance - are not met. A GLS Moat score of 4.3/10 is a weak reading: the ten-year history the score grades (revenue, EPS, book value, margins, cash flow, share count, ROIC) has not been steady, so the Moat part of the Wheel Score contributes little.
Returns on capital are thin or negative - ROIC -2.0%, ROE -7.0%, ROA -1.7% - with debt at 2.54 times equity and a free-cash-flow yield of 0.3%. Debt of 2.54 times equity is on the high side for the sector and is worth checking against the cash flow before treating the stock as a long-term hold.
Cloudflare, Inc. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Reportable 100% (quarter Q2 FY2026).
Institutional ownership scores 10/10, insider activity 1/10 and Congressional trading 1/10 on the GLS smart-money scales; the last recorded insider buy was on 17 Sep 2026.
| Piotroski F-score | 3 / 9 | ROIC | -2.0% |
|---|---|---|---|
| GLS Moat | 4.3 / 10 | ROE | -7.0% |
| Debt / equity | 2.54 | ROA | -1.7% |
| Free-cash-flow yield | 0.3% | Payout ratio | 0% |
| Institutions | 10 / 10 | Insiders · Congress | 1 · 1 / 10 |
Wheel Score 45: Weak
With a Wheel Score of 45 Cloudflare, Inc. sits in the Weak band, capped at 45 because the engine files it as Speculative / Distressed. The parts - Value 0/25, Health 7/20, Moat 6/15, Premium 17/20, Stability 19/20 - show where: Value (0/25) scores lowest.
Implied volatility is 73% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (17 of 20) because volatility this high usually comes with a reason. The option chain is deep: 85,300 contracts of open interest across all expiries, which means tight fills at most strikes.
Volume runs at 4.4M shares a day on a market cap of $112.6B, with a beta of 1.65 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 19 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 0 / 25 | -1779% margin of safety | |
| Health | 7 / 20 | Piotroski 3/9 | |
| Moat | 6 / 15 | moat 4.3/10 | |
| Premium | 17 / 20 | implied volatility 73% | |
| Stability | 19 / 20 | 4.4M shares/day, $112.6B cap, beta 1.65 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
Cloudflare, Inc. reports earnings on 29 Oct 2026 (after the close) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Software - Infrastructure
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| TWLO Twilio Inc. | 271.12 | 186.27 | -46% | 52Fair | $41.6B |
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| CRWV CoreWeave, Inc. Class A Common Stock | 69.69 | - | - | 45Weak | $38.4B |
| ZS Zscaler, Inc. | 220.79 | 105.30 | -110% | 45Weak | $35.7B |
| OKTA Okta, Inc. | 208.52 | 81.68 | -155% | 66Good | $34.9B |
| ORCL Oracle Corporation | 134.45 | 178.67 | +25% | 83Prime | $406.5B |
| MDB MongoDB, Inc. | 366.49 | 60.48 | -506% | 58Fair | $29.5B |
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Start free See the Sunday ScanQuestions about NET
Is NET undervalued right now?
No: at 316.13 the stock trades 1779% above the GLS average fair value of 16.82 (data as of 16 Oct 2026), well beyond what trailing earnings, cash flow and book value support.
What is the Wheel Score of NET and what does it mean?
NET scores 45 out of 100 (Weak). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for NET?
16.82 per share as of 16 Oct 2026 - the simple average of the 2 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Cloudflare, Inc. report earnings next?
The next earnings report is due on 29 Oct 2026 (after the close), 13 days from the data date of 16 Oct 2026. The Calendars page lists every upcoming report with its time of day.
Does NET have listed options, and how liquid are they?
Yes. The nightly snapshot found 1,000 listed contracts with 85,300 open interest across all expiries and implied volatility of 73% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.