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.
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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