In the rapidly evolving technology sector, choosing the right software infrastructure company can significantly impact an investor’s portfolio. Cloudflare, Inc. (NET) and Gen Digital Inc. (GEN) both operate in cybersecurity and cloud services, targeting overlapping markets with innovative security solutions. While Cloudflare focuses on integrated cloud-based protection and performance, Gen Digital emphasizes consumer cyber safety and identity protection. This analysis will help you decide which company offers the most compelling investment opportunity today.
Table of contents
Companies Overview
I will begin the comparison between Cloudflare and Gen Digital by providing an overview of these two companies and their main differences.
Cloudflare Overview
Cloudflare, Inc. is a cloud services provider focused on delivering integrated cloud-based security and performance solutions globally. The company secures a variety of platforms including public and private clouds, on-premise systems, SaaS applications, and IoT devices. Its offerings include cloud firewall, DDoS protection, content delivery, and developer tools, serving industries such as technology, healthcare, finance, retail, and government.
Gen Digital Overview
Gen Digital Inc. specializes in consumer cyber safety solutions across multiple regions including the US, Europe, and Asia Pacific. Its products cover malware protection, identity theft prevention, VPN services, and online reputation management. Gen Digital markets its offerings through retailers, telecom providers, and e-commerce platforms, focusing on personal cybersecurity and privacy for PCs, Macs, and mobile devices.
Key similarities and differences
Both companies operate in the Software – Infrastructure industry and provide security solutions, yet Cloudflare emphasizes enterprise cloud security and network performance, while Gen Digital targets consumer cybersecurity services. Cloudflare’s business model includes developer tools and network infrastructure, whereas Gen Digital focuses on subscription-based personal protection products and identity monitoring. Their geographic reach and customer segments also differ significantly.
Income Statement Comparison
This table compares the key income statement metrics for Cloudflare, Inc. and Gen Digital Inc. for their most recent fiscal years, providing a snapshot of their financial performance.
| Metric | Cloudflare, Inc. (2024) | Gen Digital Inc. (2025) |
|---|---|---|
| Market Cap | 64.5B | 16.1B |
| Revenue | 1.67B | 3.94B |
| EBITDA | 62.0M | 2.03B |
| EBIT | -65.7M | 1.61B |
| Net Income | -78.8M | 643M |
| EPS | -0.23 | 1.04 |
| Fiscal Year | 2024 | 2025 |
Income Statement Interpretations
Cloudflare, Inc.
Cloudflare’s revenue displayed strong growth from 2020 to 2024, rising from $431M to $1.67B, with net income losses narrowing substantially. Gross margins remained favorable at 77.3%, while net and EBIT margins were negative but improving. The 2024 year showed a marked improvement in profitability metrics, with revenue growth of 28.8% and net margin growth of 66.7%, indicating progress toward profitability.
Gen Digital Inc.
Gen Digital experienced steady revenue growth from $2.55B in 2021 to $3.94B in 2025, with positive net income increasing but at a slower pace recently. Gross margin remained strong at 80.3%, supported by robust EBIT and net margins of 40.8% and 16.3%, respectively. The most recent year showed modest revenue growth of 3.6% and a slight net margin increase of 2.3%, reflecting relative stability but slower expansion.
Which one has the stronger fundamentals?
Cloudflare demonstrates rapid revenue expansion with improving margins but still posts net losses, suggesting a growth-focused phase. Gen Digital shows more stable profitability with solid positive margins and earnings but slower revenue growth. Both have favorable income statement evaluations, yet Cloudflare’s faster growth contrasts with Gen Digital’s stronger profitability, indicating different fundamental strengths depending on investor priorities.
Financial Ratios Comparison
This table presents the key financial ratios for Cloudflare, Inc. (NET) and Gen Digital Inc. (GEN) based on their most recent fiscal year data, facilitating a straightforward comparison.
| Ratios | Cloudflare, Inc. (NET) 2024 | Gen Digital Inc. (GEN) 2025 |
|---|---|---|
| ROE | -7.53% | 28.34% |
| ROIC | -6.06% | 7.77% |
| P/E | -466.5 | 25.36 |
| P/B | 35.14 | 7.19 |
| Current Ratio | 2.86 | 0.51 |
| Quick Ratio | 2.86 | 0.51 |
| D/E | 1.40 | 3.66 |
| Debt-to-Assets | 44.32% | 53.66% |
| Interest Coverage | -29.78 | 2.79 |
| Asset Turnover | 0.51 | 0.25 |
| Fixed Asset Turnover | 2.63 | 36.10 |
| Payout ratio | 0% | 48.68% |
| Dividend yield | 0% | 1.92% |
Interpretation of the Ratios
Cloudflare, Inc.
Cloudflare exhibits mostly unfavorable financial ratios with negative net margin (-4.72%) and return on equity (-7.53%), indicating profitability challenges. Its current and quick ratios are strong at 2.86, signaling good short-term liquidity. The company does not pay dividends, likely reflecting reinvestment in growth and a focus on R&D, as suggested by high research expenses and negative free cash flow.
Gen Digital Inc.
Gen Digital shows favorable profitability with a 16.34% net margin and strong return on equity at 28.34%, though some liquidity ratios are weak, with a current ratio of 0.51. Its dividend yield is 1.92%, indicating a moderate return to shareholders. The payout appears sustainable given positive earnings, though leverage is relatively high with a debt-to-equity ratio of 3.66, which could pose risks.
Which one has the best ratios?
Gen Digital holds a slight edge with better profitability and dividend returns, despite weaker liquidity and higher leverage. Cloudflare struggles with negative returns and no dividends, though it maintains good liquidity. Overall, Gen’s ratios are slightly unfavorable but more balanced compared to Cloudflare’s predominantly unfavorable profile.
Strategic Positioning
This section compares the strategic positioning of Cloudflare, Inc. (NET) and Gen Digital Inc. (GEN), including Market position, Key segments, and exposure to technological disruption:
Cloudflare, Inc. (NET)
- Leading cloud services provider with significant market cap and high beta, facing infrastructure software competition.
- Key segments include cloud security, performance, reliability, and developer solutions serving multiple industries globally.
- Operates in cloud infrastructure with integrated security, performance, and reliability solutions; exposed to evolving cloud technologies.
Gen Digital Inc. (GEN)
- Cyber safety focused company with smaller market cap and moderate beta, competing in consumer security software.
- Core business centers on consumer cyber safety products, identity protection, VPN, and privacy solutions worldwide.
- Concentrated exposure to cybersecurity and privacy technology disruption in consumer markets with subscription-based services.
Cloudflare, Inc. (NET) vs Gen Digital Inc. (GEN) Positioning
NET pursues a diversified cloud infrastructure strategy spanning multiple security and performance solutions, while GEN concentrates on consumer cyber safety and identity protection. NET’s broad industry reach contrasts with GEN’s focused consumer market approach, each presenting distinct competitive dynamics.
Which has the best competitive advantage?
Both companies are currently shedding value with ROIC below WACC; NET shows a growing ROIC trend (slightly unfavorable), while GEN’s declining ROIC trend is very unfavorable, indicating NET’s competitive advantage is marginally stronger based on MOAT evaluation.
Stock Comparison
The past year has seen Cloudflare, Inc. (NET) deliver a significant 87.07% price increase with a decelerating bullish trend, while Gen Digital Inc. (GEN) showed a more moderate 17.89% gain, also with deceleration; recent months reveal contrasting short-term dynamics.
Trend Analysis
Cloudflare, Inc. (NET) experienced a strong bullish trend over the past 12 months with an 87.07% price increase, notable highs at 253.3, and lows at 67.69, though recent months show a 27.29% decline indicating short-term weakness.
Gen Digital Inc. (GEN) showed a bullish trend with a 17.89% price increase over the last year, low volatility with a 2.59 std deviation, and a near-neutral recent trend of -0.99% suggesting stability in the short term.
Comparing both stocks, Cloudflare, Inc. (NET) outperformed Gen Digital Inc. (GEN) by a wide margin over the past year, delivering the highest market performance despite recent short-term pullbacks.
Target Prices
The current analyst consensus presents a positive outlook for both Cloudflare, Inc. and Gen Digital Inc.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Cloudflare, Inc. | 300 | 210 | 248.86 |
| Gen Digital Inc. | 32 | 31 | 31.5 |
Analysts expect Cloudflare’s stock to appreciate considerably from its current price of 184.17 USD, while Gen Digital’s consensus target of 31.5 USD suggests moderate upside from its present 26.1 USD.
Analyst Opinions Comparison
This section compares analysts’ ratings and grades for Cloudflare, Inc. and Gen Digital Inc.:
Rating Comparison
Cloudflare, Inc. Rating
- Rating: D+, reflecting a very unfavorable overall status.
- Discounted Cash Flow Score: 1, very unfavorable valuation.
- ROE Score: 1, very unfavorable profitability efficiency.
- ROA Score: 1, very unfavorable asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 1, very unfavorable financial standing.
Gen Digital Inc. Rating
- Rating: B, indicating a very favorable overall status.
- Discounted Cash Flow Score: 5, very favorable valuation.
- ROE Score: 5, very favorable profitability efficiency.
- ROA Score: 3, moderate asset utilization.
- Debt To Equity Score: 1, very unfavorable financial risk.
- Overall Score: 3, moderate financial standing.
Which one is the best rated?
Based on the data, Gen Digital Inc. holds a better rating overall with a B grade and stronger scores in discounted cash flow, ROE, and ROA. Cloudflare, Inc. displays uniformly very unfavorable scores and a D+ rating.
Scores Comparison
Here is a comparison of the Altman Z-Score and Piotroski Score for Cloudflare, Inc. and Gen Digital Inc.:
Cloudflare, Inc. Scores
- Altman Z-Score: 9.47, indicating a safe zone with low bankruptcy risk.
- Piotroski Score: 2, classified as very weak financial strength.
Gen Digital Inc. Scores
- Altman Z-Score: 1.25, indicating distress zone with high bankruptcy risk.
- Piotroski Score: 6, considered average financial strength.
Which company has the best scores?
Cloudflare, Inc. shows a much stronger Altman Z-Score, indicating better bankruptcy safety, while Gen Digital Inc. has a higher, though average, Piotroski Score. Based on these metrics, their financial stability and strength differ notably.
Grades Comparison
Here is a detailed comparison of the recent grades assigned to Cloudflare, Inc. and Gen Digital Inc.:
Cloudflare, Inc. Grades
The following table summarizes recent grades from established grading companies for Cloudflare, Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Citigroup | Maintain | Buy | 2026-01-16 |
| UBS | Maintain | Neutral | 2026-01-13 |
| Piper Sandler | Maintain | Neutral | 2026-01-05 |
| Argus Research | Maintain | Buy | 2025-11-10 |
| Susquehanna | Maintain | Neutral | 2025-11-03 |
| Citigroup | Maintain | Buy | 2025-11-03 |
| Cantor Fitzgerald | Maintain | Neutral | 2025-10-31 |
| Stifel | Maintain | Buy | 2025-10-31 |
| UBS | Maintain | Neutral | 2025-10-31 |
| Keybanc | Maintain | Overweight | 2025-10-31 |
Cloudflare’s grades show a consistent preference for “Buy” and “Neutral” ratings, reflecting a balanced but optimistic outlook.
Gen Digital Inc. Grades
The following table presents recent grades from recognized grading firms for Gen Digital Inc.:
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| RBC Capital | Maintain | Sector Perform | 2025-11-07 |
| Evercore ISI Group | Maintain | Outperform | 2025-11-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-09-02 |
| Barclays | Maintain | Equal Weight | 2025-08-08 |
| Wells Fargo | Maintain | Overweight | 2025-08-08 |
| RBC Capital | Maintain | Sector Perform | 2025-08-08 |
| Barclays | Maintain | Equal Weight | 2025-07-14 |
| RBC Capital | Maintain | Sector Perform | 2025-05-07 |
| Morgan Stanley | Maintain | Equal Weight | 2025-04-16 |
| RBC Capital | Maintain | Sector Perform | 2025-01-31 |
Gen Digital’s grades mostly range from “Sector Perform” to “Equal Weight,” with occasional “Outperform” and “Overweight” ratings, indicating moderate confidence from analysts.
Which company has the best grades?
Cloudflare, Inc. has received a higher proportion of “Buy” and “Overweight” ratings compared to Gen Digital Inc., which mostly holds “Sector Perform” and “Equal Weight” grades. This suggests stronger analyst conviction in Cloudflare, potentially affecting investor sentiment toward more growth-oriented positioning.
Strengths and Weaknesses
Below is a comparison table summarizing the key strengths and weaknesses of Cloudflare, Inc. (NET) and Gen Digital Inc. (GEN) based on their latest financial and operational data.
| Criterion | Cloudflare, Inc. (NET) | Gen Digital Inc. (GEN) |
|---|---|---|
| Diversification | Moderate focus on cloud services; limited product segments with $1.67B revenue in 2024 | Well diversified in cybersecurity with $3.89B in Cyber Safety revenues and additional legacy products |
| Profitability | Negative net margin (-4.72%), ROIC -6.06%, shedding value but ROIC improving | Positive net margin (16.34%), ROIC 7.77%, but declining ROIC trend indicates weakening profitability |
| Innovation | Growing ROIC trend suggests improving operational efficiency despite current losses | Innovation challenged by declining ROIC; stable product lines but less growth momentum |
| Global presence | Strong global cloud infrastructure presence but financials remain unfavorable | Large global footprint in cybersecurity with strong revenue base |
| Market Share | Growing but financial instability limits market power | Significant market share in consumer and enterprise cybersecurity |
Key takeaways: Cloudflare shows improving profitability trends but still destroys value overall, reflecting investment in growth. Gen Digital is profitable with strong market presence but faces declining efficiency and profitability risks. Investors should balance growth potential versus financial stability when choosing between these stocks.
Risk Analysis
Below is a comparative table of key risks for Cloudflare, Inc. (NET) and Gen Digital Inc. (GEN) based on the latest data from 2025-2026:
| Metric | Cloudflare, Inc. (NET) | Gen Digital Inc. (GEN) |
|---|---|---|
| Market Risk | High beta (1.97) indicates higher volatility | Moderate beta (1.08), more stable market behavior |
| Debt Level | Debt-to-Equity 1.4 (unfavorable), interest coverage negative | High Debt-to-Equity 3.66, moderate interest coverage (2.78) |
| Regulatory Risk | Moderate, operates globally with increasing cybersecurity regulations | High, as a consumer cybersecurity provider facing intense regulatory scrutiny in multiple regions |
| Operational Risk | Moderate, with complex cloud infrastructure operations | Moderate, dependent on subscription services and platform stability |
| Environmental Risk | Low, primarily software-based with minimal environmental impact | Low, digital product focus with limited environmental footprint |
| Geopolitical Risk | Moderate, global customer base exposes it to international tensions | Moderate to high, exposure across diverse markets including volatile regions |
In synthesis, Cloudflare’s most impactful risks are market volatility and debt-related financial strain, reflected by unfavorable profitability ratios and negative interest coverage in 2024. Gen Digital faces significant regulatory and high debt risks, compounded by a distressing Altman Z-score (1.25), signaling financial distress and bankruptcy risk. Investors should weigh Cloudflare’s operational resilience against its financial weaknesses, while recognizing Gen Digital’s regulatory challenges and leverage risks despite stronger profitability metrics.
Which Stock to Choose?
Cloudflare, Inc. (NET) shows strong revenue growth of 287% over five years with favorable income statement metrics despite negative profitability ratios. Its financial ratios reveal mostly unfavorable scores, with high debt and weak returns on equity and assets. The company has a growing ROIC trend but remains a value destroyer. NET’s rating is very favorable, though key financial scores are mostly very unfavorable, and its Altman Z-score indicates low bankruptcy risk but a very weak Piotroski score.
Gen Digital Inc. (GEN) presents moderate revenue growth of 54% over five years, with generally favorable profitability and income metrics. Financial ratios are slightly unfavorable overall, with concerns around debt levels and liquidity ratios. GEN is also a value destroyer with declining ROIC. It holds a very favorable rating with moderate financial scores, yet its Altman Z-score places it in the distress zone, albeit with an average Piotroski score.
Investors prioritizing rapid growth and improving profitability might find Cloudflare’s profile more appealing due to its strong income growth and rating, despite financial weaknesses. Conversely, those valuing more stable profitability and moderate financial health could see Gen Digital as a potentially more balanced, though still challenged, option given its moderate rating and income stability. Both companies carry risks related to value destruction and debt, suggesting caution.
Disclaimer: Investment carries a risk of loss of initial capital. The past performance is not a reliable indicator of future results. Be sure to understand risks before making an investment decision.
Go Further
I encourage you to read the complete analyses of Cloudflare, Inc. and Gen Digital Inc. to enhance your investment decisions:
