On September 7, 2023, Matthew Prince, CEO & Chair of the Board, and 10% Owner of Cloudflare Inc (NET, Financial), sold 157,152 shares of the company. This move comes amidst a year where the insider has sold a total of 2,042,976 shares and purchased none.
Matthew Prince is a co-founder of Cloudflare Inc and has been serving as its CEO since its inception. Under his leadership, Cloudflare has grown into a leading web infrastructure and website security company, providing content delivery network services, DDoS mitigation, Internet security, and distributed domain name server services. The company's mission is to help build a better Internet, and it serves more than 12 million domains worldwide.
Cloudflare Inc, with a market cap of $20.95 billion, is a US-based company that provides businesses with a cloud platform to deliver their applications and websites securely and at a high speed. Its services protect and accelerate any Internet application online without adding hardware, installing software, or changing a line of code.
The insider's recent sell-off raises questions about the company's current valuation and future prospects. The stock was trading at $63.8 per share on the day of the insider's recent sell, giving the company a market cap of $20.95 billion.
The insider transaction history for Cloudflare Inc shows a trend of more sells than buys over the past year. There have been 66 insider sells and 0 insider buys in total. This could indicate that insiders believe the stock is currently overvalued, prompting them to sell their shares.
However, according to the GuruFocus Value, the stock appears to be significantly undervalued. With a price of $63.8 and a GuruFocus Value of $140.97, Cloudflare Inc has a price-to-GF-Value ratio of 0.45. The GF Value is an intrinsic value estimate developed by GuruFocus, calculated based on historical multiples, a GuruFocus adjustment factor, and future estimates of business performance from Morningstar analysts.
Therefore, while the insider's recent sell-off might raise concerns, the stock's current valuation according to the GuruFocus Value suggests that it might still be a good investment opportunity. Investors should conduct their own research and consider other factors such as the company's financial health, growth prospects, and industry trends before making an investment decision.
It's also worth noting that the insider's sell-off could be due to personal reasons and not necessarily reflect their outlook on the company's future performance. Therefore, while insider transactions can provide valuable insights, they should not be the sole basis for investment decisions.
