Cloudflare Inc (NYSE:NET) shares are set to move higher on Thursday Goldman Sachs Analyst Gabriela Borges upgraded the stock from sell to buy and raised the price target from $77 to $140.
The performance of securities stocks in 2024 can be explained almost entirely by the extent to which the market believed each company was a platform rather than a point product, the analyst said.
Borges highlighted two catalysts for Cloudflare stock in 2025, including an improving sales and marketing productivity cycle after two years of evolution to better address platform sales in the enterprise and traction with Act III developer services products as Cloudflare leverages its core edge network architecture advantages applies to new use cases for AI inference.
The price target increase reflects a jump in the multiple from 11x to 20x (Q5-Q8 revenue), raising the analyst’s 2026 revenue estimates by 2% given his sales productivity view and Act III.
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Borges changed its EPS estimates for 2024, 2025 and 2026 from $0.75, $0.86 and $1.12 to $0.75, $0.90 and $1.32, driven by slightly more margin expansion, which achieved the highest target multiple in marks his cover.
Borges demoted Check Point Software Technologies (NASDAQ:CHKP) from Buy to Neutral and raised the price target from $204 to $207.
The analyst highlighted 2025 as a year of increasing investment for Check Point, as the new CEO evaluates growth priorities and the company ramps up its new SASE products. Overall, the analyst noted that EPS growth will be under pressure through 2025, and that the stock tends to track EPS growth. He saw an opportunity to become more positive in 2026, as the path to 10%+ revenue growth and 20%+ EPS growth comes back into focus if Check Point successfully turns incremental investments into incremental revenue growth .
Borges compared Check Point to software companies with revenue growth of less than 10% and sufficient earnings per share to be valued using a price-earnings ratio. Compared to this peer group (average 2025 price-to-earnings ratio of 17x), Check Point offers similar revenue growth (6% on Street estimates vs. 6% for peers in 2025), but a better line of 40 (~47 vs. 35).
The analyst also used the S&P 500 as a point of comparison: the S&P 500 trades at 22x EPS in 2025 and offers ~10% EPS; compared to the S&P 500, Check Point offers similar earnings growth across the cycle.
Borges revised earnings per share for 2024, 2025 and 2026 from $9.10, $9.75 and $10.95 to $9.10, $9.45 and $10.65 to reflect a trend in operating expenses that is consistent with recent history and introduced 2027 earnings per share of $12.25.
