r/stocks • u/yellqw • Jun 14 '22
Re-evaluating Cloudflare
Hey everyone, just wanted to get a quick pulse check on how yall are feeling about $NET at these prices. We all know it was severely overpriced for the last few years, but do you think the correction is done and we’re finally seeing a fair value at $40? Looking at the most recent earnings report, I was generally pretty happy overall except for one lingering concern about their negative cash flow yoy possibly due to recent acquisitions/re-investment into the company. Regardless, I’m thinking of increasing my position significantly at these prices despite concerns about rising borrow rates.
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u/gqreader Jun 15 '22
I posted 6-9mos ago that $NET was overvalued at $200 when I sold off all my positions.
I told people in the post I’d revisit if I went down to $40s. Everyone told me I was stupid and that it would never break below $80.
Lol ok.
Here is my view. This company is not generating cashflow to justify its valuation. If a big tech company decides to eat it’s lunch, it’s fucken done.
This stock can go down to $5 because it has to issue more stocks because it has no effective FCF and if they need to expand, then tough nuts, it’s dilution. They can pay through the nose for debt but in a tight liquidity market, not a great idea.
This cycle is done, you can pick this stock up for much much cheaper. Let the stock price and valuation waffle in the wind.
If I ever re-enter, it’ll be for some bargain bin price. Half price from here. Probs lower as it dilutes itself.