Cloudflare, Inc.

(New York Stock Exchange)
Back to all articles
Very Bullish +85

NET Stock Rises 10% Post Q3 Results: Should You Buy, Sell or Hold?

Customer contract Earnings report Guidance raised AI-generated analysis

πŸ“ˆ NET shares gained 9.9% after Q3 2026 results beat estimates with $782.5M revenue (up 39.2% YoY) and 38 cents EPS.

πŸš€ Company raised 2026 revenue guidance to $2.963B-$2.964B (approx. 37% growth) and EPS guidance to $1.35/share.

πŸ›‘οΈ Major contract wins include a five-year, $10.3M deal with a U.S. federal department and an $11M AI company agreement for the Workers platform.

πŸ’» Cloudflare's Workers Developer Platform crossed 10 million active developers in Q3 2026, nearly doubling from the previous quarter.

πŸ“Š Customer spending trends improved with a dollar-based net retention rate increasing to 122% in the third quarter.

πŸ† NET stock surged 36.3% year-to-date, significantly outperforming peers like F5 (21.8%) and Zscaler (-12.1%).

πŸ” Strong demand for AI-native cybersecurity solutions is driving growth in SASE and Zero Trust offerings.

πŸ’° Valuation remains premium with a forward P/S ratio of 26.58X versus an industry average of roughly 3.67X.

Bullish Signals
  • Cloudflare reported Q3 2026 non-GAAP earnings of 38 cents per share, beating the Zacks Consensus Estimate by 8.6%.
  • Third-quarter revenues reached $782.5 million, surpassing consensus estimates by 6.6% and growing 39.2% year over year.
  • The company raised its full-year 2026 revenue guidance to a range of $2.963 billion to $2.964 billion, representing approximately 37% growth.
  • Non-GAAP earnings guidance was increased to $1.35 per share from the earlier range of $1.25-$1.26.
  • Cloudflare secured a five-year, $10.3 million contract with a U.S. federal department to replace its legacy security system.
  • A rapidly growing AI company signed a one-year, $11 million pool-of-funds contract for the Workers Developer Platform.
  • The Workers Developer Platform crossed 10 million active developers in Q3 2026, up from 7 million in the previous quarter.
  • Cloudflare added more than 158,000 paying customers in the third quarter, nearly double its previous quarterly record.
  • The company's dollar-based net retention rate increased to 122% in the third quarter from 119% a year earlier.
Full Analysis
Cloudflare, Inc. (NET) shares rose 9.9% following the release of its third-quarter 2026 results on November 5, driven by earnings that significantly beat analyst expectations. The company reported non-GAAP earnings of 38 cents per share, surpassing the Zacks Consensus Estimate by 8.6%, while revenue reached $782.5 million, exceeding estimates by 6.6% and growing 39.2% year over year. Buoyed by this strong performance, Cloudflare raised its full-year 2026 guidance, projecting revenues between $2.963 billion and $2.964 billion, representing approximately 37% growth compared to the previous estimate of roughly 32%. Non-GAAP earnings guidance was also increased to $1.35 per share from a prior range of $1.25-$1.26, signaling robust financial health and future outlook. The company is capitalizing on rising demand for AI-native cybersecurity solutions and its Workers Developer Platform. Key wins include a five-year, $10.3 million contract with a U.S. federal department to replace legacy security systems and a one-year, $11 million agreement with an AI company for the Workers platform. Additionally, active developers on the Workers platform crossed 10 million, up from 7 million in the previous quarter. Despite trading at a premium valuation with a forward price-to-sales ratio of 26.58X compared to industry peers averaging around 4.74X to 7.86X, investors remain confident in Cloudflare's long-term growth driven by AI security demand and expanding enterprise adoption. The stock has surged 36.3% year to date, outperforming the broader internet software sector and competitors like F5 and Zscaler.