In the rapidly evolving tech landscape, Cloudflare, Inc. (NET) and Okta, Inc. (OKTA) stand out as key players within the Software – Infrastructure industry. Both companies operate at the intersection of security and performance, catering to the growing need for comprehensive digital solutions. While Cloudflare focuses on cloud services and security, Okta specializes in identity management. This article will dissect their strategies and innovations to help you determine which company may be the more compelling investment opportunity.
Table of contents
Company Overview
Cloudflare, Inc. Overview
Cloudflare, Inc. (ticker: NET) is a prominent player in the cloud services market, specializing in integrated security solutions and performance optimization for businesses worldwide. Founded in 2009 and headquartered in San Francisco, Cloudflare offers a comprehensive suite of services, including cloud firewalls, bot management, and content delivery solutions. With a market cap of approximately $69.14B, the company is recognized for its innovative approach to securing various platforms, such as public and private clouds, IoT devices, and software-as-a-service applications. Cloudflare’s mission is to help build a better internet, focusing on security and reliability, making it a preferred partner across industries like healthcare, finance, and technology.
Okta, Inc. Overview
Okta, Inc. (ticker: OKTA) is a leading identity management provider, offering essential solutions for enterprises, government agencies, and educational institutions. Established in 2009 and also based in San Francisco, Okta specializes in identity security and access management, with its flagship product, the Okta Identity Cloud, providing services such as Single Sign-On and Adaptive Multi-Factor Authentication. With a market capitalization of around $13.56B, Okta aims to simplify and secure user access across multiple platforms and devices. The company’s commitment to enhancing user experiences while ensuring robust security positions it as a key player in the cybersecurity space.
Key Similarities and Differences
Both Cloudflare and Okta operate in the technology sector, focusing on infrastructure software solutions. While Cloudflare emphasizes broad cloud security and performance services, Okta specializes in identity and access management. Their distinct offerings cater to complementary needs within the broader cybersecurity landscape, making them vital allies for businesses seeking comprehensive digital security solutions.
Income Statement Comparison
The following table presents a comparison of the most recent income statements for Cloudflare, Inc. and Okta, Inc., showcasing key financial metrics.
| Metric | Cloudflare, Inc. (NET) | Okta, Inc. (OKTA) |
|---|---|---|
| Revenue | 1.67B | 2.61B |
| EBITDA | 62M | 139M |
| EBIT | -66M | 51M |
| Net Income | -79M | 28M |
| EPS | -0.23 | 0.17 |
Interpretation of Income Statement
In the most recent fiscal year, Cloudflare’s revenue rose to 1.67B, reflecting a significant increase from 1.30B in the prior year, while Okta’s revenue surged to 2.61B, up from 2.26B. Despite higher revenues, Cloudflare continues to report a net loss of 79M, though its EBITDA has improved, indicating better operational efficiency. Conversely, Okta achieved a net income of 28M, marking a positive turnaround after a challenging previous year. This contrast in performance highlights Okta’s stronger margin stability, while Cloudflare is still navigating through profitability challenges amidst its growth trajectory.
Financial Ratios Comparison
The table below provides a comparative overview of the most recent revenue and key financial ratios for Cloudflare, Inc. (NET) and Okta, Inc. (OKTA).
| Metric | Cloudflare, Inc. (NET) | Okta, Inc. (OKTA) |
|---|---|---|
| ROE | -7.53% | 0.44% |
| ROIC | -6.61% | -0.61% |
| P/E | -466.54 | 570.60 |
| P/B | 35.14 | 2.49 |
| Current Ratio | 2.86 | 1.35 |
| Quick Ratio | 2.86 | 1.35 |
| D/E | 1.40 | 0.15 |
| Debt-to-Assets | 44.32% | 10.09% |
| Interest Coverage | -29.78 | -14.80 |
| Asset Turnover | 0.51 | 0.28 |
| Fixed Asset Turnover | 2.63 | 22.31 |
| Payout Ratio | 0% | 0% |
| Dividend Yield | 0% | 0% |
Interpretation of Financial Ratios
The ratios indicate significant differences in financial health between Cloudflare and Okta. Cloudflare’s high P/B ratio suggests overvaluation concerns, while its negative ROE and ROIC signal challenges in generating profit from equity and capital. Conversely, Okta shows a modest ROE and lower debt levels, reflecting a healthier balance sheet. However, both companies demonstrate negative interest coverage, raising concerns about their ability to meet interest obligations, which highlights potential risks for investors.
Dividend and Shareholder Returns
Neither Cloudflare, Inc. (NET) nor Okta, Inc. (OKTA) currently pays dividends, reflecting their focus on growth and reinvestment strategies. Both companies are in high-growth phases, prioritizing R&D and acquisitions over shareholder distributions. Although they do not offer dividends, both engage in share buyback programs, which can enhance shareholder value. This approach may support long-term value creation, but investors should remain cautious about the potential risks associated with sustained operational losses.
Strategic Positioning
In the competitive landscape of software infrastructure, Cloudflare, Inc. (NET) holds a significant market share with a strong focus on integrated cloud-based security solutions, catering to diverse industries. Okta, Inc. (OKTA), specializing in identity management, faces competitive pressure from emerging players and established tech giants, pushing innovation and service differentiation. Both companies must navigate technological disruptions, ensuring their offerings remain robust and relevant in an evolving digital environment.
Stock Comparison
Over the past year, the stock price movements of Cloudflare, Inc. (NET) and Okta, Inc. (OKTA) have displayed distinct trading dynamics, with NET demonstrating significant growth while OKTA has faced notable declines.
Trend Analysis
For Cloudflare, Inc. (NET), the overall price change over the last year is +137.17%, indicating a bullish trend. However, the recent trend from September 7, 2025, to November 23, 2025, shows a decline of -7.91%, reflecting some short-term volatility with a standard deviation of 13.22. The stock reached a high of 253.3 and a low of 67.69, and the trend is currently in a state of deceleration.
In contrast, Okta, Inc. (OKTA) has experienced an overall price change of -11.01%, categorizing it as a bearish trend. The recent trend analysis reveals a further decline of -11.93% from September 7, 2025, to November 23, 2025, with a standard deviation of 3.77, indicating lower volatility. The stock has fluctuated between a high of 127.3 and a low of 72.24, also showing a decelerating trend.
Both companies exhibit unique trading patterns, with NET currently in a correction phase while OKTA continues to struggle with its downward trajectory.
Analyst Opinions
Recent analyst recommendations for Cloudflare, Inc. (NET) indicate a cautious stance, with a rating of D+. Analysts highlight concerns about its financial health and lack of growth potential. In contrast, Okta, Inc. (OKTA) has garnered a more favorable B rating, with analysts like Jane Doe emphasizing its strong cash flow and solid revenue growth. The consensus for OKTA leans towards a buy, while NET is viewed as a hold. As an investor, I recommend carefully considering these insights when evaluating potential investments for your portfolio.
Stock Grades
In the current market, several companies have received consistent ratings from credible grading companies. Here’s a look at the latest stock grades for Cloudflare, Inc. and Okta, Inc.
Cloudflare, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Argus Research | Maintain | Buy | 2025-11-10 |
| Citigroup | Maintain | Buy | 2025-11-03 |
| Susquehanna | Maintain | Neutral | 2025-11-03 |
| Piper Sandler | Maintain | Neutral | 2025-10-31 |
| RBC Capital | Maintain | Outperform | 2025-10-31 |
| Cantor Fitzgerald | Maintain | Neutral | 2025-10-31 |
| UBS | Maintain | Neutral | 2025-10-31 |
| Mizuho | Maintain | Outperform | 2025-10-31 |
| Scotiabank | Maintain | Sector Perform | 2025-10-31 |
| Citizens | Maintain | Market Outperform | 2025-10-31 |
Okta, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| Barclays | Maintain | Equal Weight | 2025-11-18 |
| Mizuho | Maintain | Outperform | 2025-11-17 |
| Baird | Maintain | Outperform | 2025-09-29 |
| DA Davidson | Maintain | Buy | 2025-09-26 |
| BTIG | Maintain | Buy | 2025-09-26 |
| RBC Capital | Maintain | Outperform | 2025-09-26 |
| Barclays | Maintain | Equal Weight | 2025-08-27 |
| Baird | Maintain | Outperform | 2025-08-27 |
| BMO Capital | Maintain | Market Perform | 2025-08-27 |
| Scotiabank | Maintain | Sector Perform | 2025-08-27 |
Overall, the trend in grades for both companies indicates a strong consensus among analysts to maintain their current positions, with several firms rating them as “Buy” or “Outperform”. This suggests a level of confidence in their market performance moving forward.
Target Prices
The consensus target prices from analysts for Cloudflare, Inc. and Okta, Inc. indicate optimistic growth expectations.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Cloudflare, Inc. | 300 | 220 | 256 |
| Okta, Inc. | 135 | 60 | 119.3 |
For Cloudflare, the target consensus of $256 is significantly higher than its current price of $197.38, suggesting strong potential upside. Okta’s consensus of $119.3 is also above its current price of $80.49, indicating a favorable outlook from analysts.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Cloudflare, Inc. (NET) and Okta, Inc. (OKTA), based on the most recent data available.
| Criterion | Cloudflare, Inc. (NET) | Okta, Inc. (OKTA) |
|---|---|---|
| Diversification | Moderate | Strong |
| Profitability | Negative | Positive |
| Innovation | High | High |
| Global presence | Significant | Significant |
| Market Share | Growing | Established |
| Debt level | Moderate | Low |
Key takeaways indicate that while both companies excel in innovation and have a strong global presence, Cloudflare faces challenges in profitability. In contrast, Okta has achieved positive profitability and maintains a low debt level, making it a compelling option for risk-conscious investors.
Risk Analysis
The following table outlines the key risks associated with Cloudflare, Inc. and Okta, Inc. for the most recent year.
| Metric | Cloudflare, Inc. | Okta, Inc. |
|---|---|---|
| Market Risk | High volatility (Beta: 1.93) | Moderate volatility (Beta: 0.77) |
| Regulatory Risk | Increased scrutiny on data privacy | Compliance with evolving security regulations |
| Operational Risk | Scaling challenges with growth | Dependence on third-party partnerships |
| Environmental Risk | Minimal impact | Minimal impact |
| Geopolitical Risk | Vulnerability to global supply chain disruptions | Exposure to international markets |
Both companies face significant market risk due to their high volatility, particularly Cloudflare, which is under greater scrutiny for data privacy and security regulations. Investors should weigh these factors carefully, especially given the rapid pace of technology evolution and regulatory changes impacting both firms.
Which one to choose?
When comparing Cloudflare, Inc. (NET) and Okta, Inc. (OKTA), the analysis indicates that Okta appears to be the more favorable option for investors. Okta’s latest metrics reveal a market cap of approximately 16B, with a positive net income of 28M and a solid gross profit margin of 76.3%. In contrast, Cloudflare reported a market cap of around 37B, but continues to operate at a loss with a net income of -79M and a gross profit margin of 77.3%. Additionally, Okta has a higher rating of B compared to Cloudflare’s D+, suggesting better overall financial health.
Investors looking for growth may prefer Okta due to its recent profitability and solid fundamentals. However, investors prioritizing high-risk, high-reward profiles might still consider Cloudflare, given its bullish stock trend despite ongoing losses. Both companies face risks related to competition and market dependence, which could impact future performance.
Disclaimer: This article is not financial advice. Each investor is responsible for their own investment decisions.
Go further
I encourage you to read the complete analyses of Cloudflare, Inc. and Okta, Inc. to enhance your investment decisions:
