Cloudflare stock is cheap right now too.
I went in fairly big (for me) and sold near the top with a stop loss #gainz. Then bought again when it went down like 10% trying to 'buy the dip.' But it keeps falling!
I don't get it. I love their products and ambition. That was a huge bump and decline.
Anecdotally, I have yet to work with a company paying Cloudflare substantial amounts of money.
Maybe something about 'large edge network cloud to reach your customer quicker' or something I'm not sure how to describe it in a compelling way. Maybe sprinkle on some web3 or distributed bs.
I think AWS, now Google is getting there, have that a lot of stickyness because it has all the services imaginable interconnected (not well sometimes but still). It's a platform not individual products. It's hard to pickup and leave, especially if Cloudflare doesn't have 1:1 replacements.
“Workers” is brilliant, but the strategy with WASM on it is where I really think it is going to shine. The more languages and more of your stack that can be compelled to WASM the more you will be able to run on their edge. I truly believe WASM is the future in so many places other than in the browser.
I also feel the one part of their stack that’s missing is a transactional acid database (I hope for sql, but nosql would be fine). But it highlights a fault with the “edge first” strategy. Workers at the edge making multiple round trip requests to a central database is slower than running your app closer to the db. My wish is that they are developing some sort of edge replaced db that automatically launches read replicas at the same edge locations as where most of your worker load is. You probably have to have the main/master in a central location though. (I think Fly.io are doing something a little like this with Postgres)
This thing makes like $500m of annual revenue, not profit, whatever path to profitability one can imagine, hard to see how it can be "worth" $32000m. It's like 5000 years of earnings are priced in along with the assumption competitors don't try too hard for the same time period.
Basically every reality-based investor has long left the room. It's a meme stock. It's Dogecoin for devops kids. Underlying biz does not matter for meme stocks, one must look at what the meme lovers do, what trend they follow, etc. At the moment they're being moody, that's why it's down for now along with similar memetech stocks.
As a bonus they provide the captchas for all the crypto sites. When that sugar daddy leaves the room, LOL.
FB was probably undervalued 8ish years ago. But FB also had a clearer narrative around TAM and LTV than NET does.
The current price bakes in some biggish assumptions (1) NET’s TAM is not even close to saturated (2) LTV per customer will keep growing as NET adds on new services that existing customers will want to pay for. There are many valid reasons to believe this, if you follow their earnings calls.
That doesn’t mean today’s price is bona fide bad or good. Rather, it reflects Wall St’s faith in Cloudflare’s ability to materialize grand-but-achievable ambitions.
The earlier peak price had far too much growth priced in, it was not sustainable imo. When price outpaces value, it’s normal to see a correction.