Cloudflare Stock Extends A 5-Day Losing Streak To An 18% Loss
Shares of Cloudflare (NET) have closed lower in each of the last 5 sessions, a cumulative decline of 17.9%. That erased about $22.9 billion from the company’s market value, which now stands at about $105.0 billion. The stock closed at $296.30 on Friday, October 16, 17.9% below its 52-week high of $360.93 and 85.0% above its low of $160.19.
The Streak Next To The S&P 500
Returns for NET and the S&P 500 over the streak and the periods around it, all ending Friday, October 16 and including dividends:
| Return Period | NET | S&P 500 |
|---|---|---|
| 1 Day | -6.3% | -1.1% |
| 5 Days (Current Streak) | -17.9% | -1.9% |
| 1 Month (21 Trading Days) | -11.3% | 0.4% |
| 3 Months (63 Trading Days) | 8.8% | 3.2% |
| Year To Date | 50.3% | 12.9% |
| 1 Year (252 Trading Days) | 36.3% | 16.2% |
A Stock-Specific Slide, Or A Market Move?
Over the same 5 trading days, the S&P 500 returned -1.9% including dividends, so the slide is mostly Cloudflare’s own story rather than the market’s. Over the past three months the stock is up 8.8%, a window that includes the streak; over the other 58 sessions of that window it was up 32.5%.
What The Numbers Say About The Slide
On the fundamentals, revenue grew 33.5% over the last twelve months, against a median of 17.9% for S&P 500 Information Technology stocks; and its operating margin is -8.1%, versus a median of 21.6%. Cloudflare does not have positive trailing earnings, so there is no meaningful price-to-earnings multiple to compare. The fundamentals give the sellers some support: an operating loss.
If the drop has you weighing an entry, resist buying on price alone. Our Buy the Dip screen ranks the marked-down names where growth and cash generation still hold up.
Weakness In One Name Should Be Noise, Not News
For a diversified holder, a streak like this is a data point. For a concentrated one, it is a hole in the plan. The difference is never the stock; it is the portfolio built around it.
Building that portfolio is what the Trefis High Quality (HQ) Portfolio does: roughly 30 businesses with the cash generation and balance-sheet strength to absorb a bad month, selected and rebalanced by rules. It has a track record of outpacing a benchmark that combines the S&P 500, the S&P MidCap 400, and the Russell 2000. Make the next streak, in either direction, someone else’s drama.