Piper Sandler Lifts Cloudflare Target to $250 Despite 15% Stock Drop

A Piper Sandler analyst raised his price target on Cloudflare Inc. to $250 following its first-quarter earnings report, a bullish call that contrasts with a more than 15 percent after-hours drop in the company's stock.

"We would be buyers of this pullback," Piper Sandler analyst James Fish wrote, reaffirming his Overweight rating on the shares. The note strikes a decidedly optimistic tone compared to the market's initial reaction to the company's financial results.

The upgrade lifts the price target from a previous $222. The new $250 target implies approximately 28 percent upside from Cloudflare's post-market closing price of around $194.54. The stock plunged after its second-quarter revenue guidance of $405 million to $406 million fell just shy of consensus expectations.

The conflicting signals from the analyst upgrade and the sharp stock decline create a battleground for Cloudflare shares. While the company beat first-quarter adjusted earnings estimates, reporting $0.25 per share, investors are weighing a disappointing near-term outlook against a long-term growth story. The sell-off was echoed by other names in the cloud and data space, with CoreWeave (CRWV) also tumbling after its results.

The price target increase from Piper Sandler suggests a belief that the market overreacted to the guidance. The focus now shifts to whether other analysts will follow suit or if the post-earnings dip will continue. Investors will watch the company's upcoming investor day in June for further details on its growth and AI strategy.

This article is for informational purposes only and does not constitute investment advice.