With Cloudflare Stock Sliding, Have You Assessed The Risk?
Cloudflare (NET) stock is down 20.5% in 21 trading days. The recent slide reflects renewed concerns around NET’s network reliability after a global outage, but sharp drops like this often raise a tougher question: is the weakness temporary, or a sign of deeper cracks in the story?
Before judging its downturn reslience, let’s look at where Cloudflare stands today.
- Size: Cloudflare is a $70 Bil company with $2.0 Bil in revenue currently trading at $201.26.
- Fundamentals: Last 12 month revenue growth of 28.1% and operating margin of -9.6%.
- Liquidity: Has Debt to Equity ratio of 0.05 and Cash to Assets ratio of 0.7
- Valuation: Cloudflare stock is currently trading at P/E multiple of -727.5 and P/EBIT multiple of -874.5
- Has returned (median) 12.6% within a year following sharp dips since 2010. See NET Dip Buy Analysis.
These metrics point to a Strong operational performance, alongside Very High valuation – making the stock Relatively Expensive. For details, see Buy or Sell NET Stock
That brings us to the key consideration for investors worried about this fall: how resilient is NET stock if markets turn south? This is where our downturn resilience framework comes in. Suppose NET stock falls another 20-30% to $141 – can investors comfortably hold on? Turns out, the stock has fared worse than the S&P 500 index during various economic downturns, based on (a) how much the stock fell and, (b) how quickly it recovered. Below, we dive deeper into each such downturn.
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2022 Inflation Shock
- NET stock fell 82.6% from a high of $217.25 on 18 November 2021 to $37.84 on 9 November 2022 vs. a peak-to-trough decline of 25.4% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 8 September 2025
- Since then, the stock increased to a high of $253.30 on 2 November 2025 , and currently trades at $201.26
| NET | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -82.6% | -25.4% |
| Time to Full Recovery | 1034 days | 464 days |
2020 Covid Pandemic
- NET stock fell 31.8% from a high of $23.35 on 5 March 2020 to $15.92 on 16 March 2020 vs. a peak-to-trough decline of 33.9% for the S&P 500.
- However, the stock fully recovered to its pre-Crisis peak by 30 March 2020
| NET | S&P 500 | |
|---|---|---|
| % Change from Pre-Recession Peak | -31.8% | -33.9% |
| Time to Full Recovery | 14 days | 148 days |
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