Cloudflare’s Insiders Just Sold $44 Million Into the Rally. Here’s What Every Investors Need to Know.

Cloudflare's Q2 beat and reaccelerating growth (36% revenue growth, 120% net dollar retention, record large customer adds) pushed NET stock to new highs, but the market has already paid up: NTM EV/Revenue sits at 35.17x, just below its all-time high of 36.30x and well above its roughly two-year average of 22.30x.

Free cash flow margin, the exact metric management points to as evidence of a credible path to GAAP profitability by 2028, has fallen for two straight quarters, from 14.55% in Q1 2026 to 9.71% in Q2 2026, even as severance and restructuring costs climbed toward $165 million for the year.

President Michelle Zatlyn, CFO Thomas Seifert, and director John Graham-Cumming all sold stock in August and September, Zatlyn alone disposing of roughly $44 million across two separate filings, while the company also raised $2.175 billion in convertible debt despite already holding $4.2 billion in cash.

Street consensus, which saw NET stock as 13% to 22% undervalued for most of late 2025 and early 2026, has now caught up: the mean analyst target of $336.81 sits just 4% above the September 18 close of $323.60, a far thinner cushion than investors had earlier in the rally.

Cloudflare Stock Is Already Priced for the Next Act to Work

Cloudflare's second quarter gave bulls plenty to like. Revenue grew 36% year over year to $696.1 million, beating the $665.5 million analyst estimate. The company added a record 986 large customers over the trailing year and net dollar retention accelerated to 120%, up six points from a year earlier. Management used that momentum to lean harder into its Act 4 story, the plan to turn Cloudflare's network into infrastructure for agentic commerce through products like Monetization Gateway, Wallets, and cloudflare.pay.

The market has responded by pushing Cloudflare's valuation close to its historical ceiling.

NET's NTM EV/Revenue multiple now stands at 35.17x, barely off the 36.30x high reached earlier in the current cycle and more than 12 points above its roughly two-year mean of 22.30x. Yet the growth actually showing up in the financials today is still coming from Act 2 and Act 3, Zero Trust, SASE, and the Workers developer platform.

Seifert told the Goldman Sachs conference that Workers is still the fastest growing act Cloudflare has, followed by SASE, with Act 4 monetization explicitly still ahead. That means today's near-peak multiple already prices in a meaningful slice of Act 4 success before that business has generated a measurable dollar of revenue. Seifert acknowledged the platform is not at the millions of transactions per second it will eventually need, calling it work in progress with no committed date for revenue contribution. Paying near-peak multiples for a growth vector management frames as early stage narrows the margin for error considerably.