In today’s dynamic tech landscape, Cloudflare, Inc. (NET) and Okta, Inc. (OKTA) emerge as two prominent players within the Software – Infrastructure sector. Both companies operate in overlapping markets focused on security and cloud solutions, yet they approach innovation differently. Cloudflare excels in integrated cloud services, while Okta specializes in identity and access management. As an investor, understanding their distinct strategies and market positions could guide your decision-making. Let’s delve deeper to uncover which of these companies might be a more compelling addition to your portfolio.
Table of contents
Company Overview
Cloudflare, Inc. Overview
Cloudflare, Inc. (ticker: NET) operates as a leading cloud services provider, delivering a robust suite of integrated security solutions for businesses globally. Founded in 2009 and headquartered in San Francisco, CA, Cloudflare focuses on security and performance enhancement for various platforms, including public and private clouds, IoT devices, and SaaS applications. Their offerings range from cloud firewalls and bot management to intelligent routing and content optimization. With a market cap of $70.1B and approximately 4,400 employees, Cloudflare is strategically positioned to address the evolving needs of clients across diverse sectors such as technology, healthcare, and finance.
Okta, Inc. Overview
Okta, Inc. (ticker: OKTA), established in 2009 and also based in San Francisco, CA, provides comprehensive identity and access management solutions. The company’s flagship product, the Okta Identity Cloud, is designed to streamline user authentication for enterprises and organizations, enabling secure access to applications across multiple devices. With a market cap of $14.5B and around 5,914 employees, Okta serves a wide array of clients, including universities and government agencies. Their product suite includes Single Sign-On, Adaptive Multi-Factor Authentication, and Lifecycle Management services, positioning Okta as a critical player in the cybersecurity landscape.
Key similarities and differences
Both Cloudflare and Okta operate within the technology sector, focusing on infrastructure software. However, Cloudflare emphasizes network security and performance optimization solutions, while Okta centers on identity and access management. Their diverse offerings cater to different aspects of cybersecurity, reflecting their distinct market positions.
Income Statement Comparison
In this section, I present a comparison of the most recent income statements for Cloudflare, Inc. and Okta, Inc., highlighting key financial metrics to inform your investment decisions.
| Metric | Cloudflare, Inc. | Okta, Inc. |
|---|---|---|
| Market Cap | 70.1B | 14.5B |
| Revenue | 1.67B | 2.61B |
| EBITDA | 62M | 139M |
| EBIT | -66M | 51M |
| Net Income | -78.8M | 28M |
| EPS | -0.23 | 0.17 |
| Fiscal Year | 2024 | 2025 |
Interpretation of Income Statement
In the most recent fiscal year, Cloudflare experienced revenue growth to 1.67B, marking an increase from the previous year’s 1.30B. However, it still reported a net loss of 78.8M, indicating ongoing challenges with profitability. In contrast, Okta reported revenue growth to 2.61B, alongside a positive net income of 28M, reflecting improved operational efficiency. While Cloudflare’s EBITDA remains low, Okta’s comparatively stronger margins suggest better cost management and scalability in its operations. Overall, Okta demonstrates a more favorable financial trajectory, which may appeal more to investors prioritizing profitability.
Financial Ratios Comparison
In this section, I present a comparative overview of key financial ratios for Cloudflare, Inc. (NET) and Okta, Inc. (OKTA), based on the most recent data. This will help you assess their financial health and investment potential.
| 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 | 0.44 | 0.10 |
| 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
Both companies exhibit significant challenges, particularly with negative ROE and ROIC figures, indicating they are not generating returns on equity or invested capital. Cloudflare’s exceptionally high P/E ratio suggests extreme valuation concerns, while Okta’s high P/E raises similar flags. Although Cloudflare maintains a robust current and quick ratio, indicating good liquidity, its interest coverage ratio is worrying. Okta’s ratios reflect a more stable but still concerning financial position, particularly in profitability. Investors should approach these stocks cautiously, given the evident financial stress in both firms.
Dividend and Shareholder Returns
Cloudflare, Inc. (NET) does not pay dividends, reflecting its focus on reinvestment and growth. With a negative net income and high growth initiatives, this strategy aligns with long-term shareholder value creation. The company also engages in share buybacks, which can enhance earnings per share. Similarly, Okta, Inc. (OKTA) has not distributed dividends, prioritizing innovation and expansion. Their approach, while lacking immediate returns, is aimed at fostering sustainable value for shareholders.
Strategic Positioning
Cloudflare, Inc. (NET) commands a significant market share in the cloud services sector, particularly with its integrated security solutions, while Okta, Inc. (OKTA) is a leader in identity management and authentication services. Both companies face competitive pressure from emerging technologies and established players. While Cloudflare is adapting to technological disruptions with innovative performance solutions, Okta continues to enhance its identity offerings, focusing on security and user experience. In this evolving landscape, ongoing vigilance and strategic shifts will be crucial for both companies to maintain their competitive edge.
Stock Comparison
Over the past year, the stock prices of Cloudflare, Inc. (NET) and Okta, Inc. (OKTA) have exhibited notable movements, reflecting varying trading dynamics and investor sentiment.
Trend Analysis
For Cloudflare, Inc. (NET), the overall price change over the last year stands at +153.03%, indicating a bullish trend. However, in the recent period from September 21, 2025, to December 7, 2025, the stock has seen a decline of -11.11%. This recent movement suggests a deceleration in its upward momentum. The highest price recorded was 253.3, while the lowest was 67.69. The standard deviation of 51.66 points to a high level of volatility in the stock.
In contrast, Okta, Inc. (OKTA) has experienced a total price increase of +2.16% over the past year, also reflecting a bullish trend. Similar to NET, OKTA has recently declined by -8.33% during the same timeframe mentioned above. This stock also shows a deceleration in its upward trajectory, with a highest price of 127.3 and a lowest of 72.24. The standard deviation for OKTA is lower at 11.49, indicating less volatility compared to NET.
In summary, while both stocks have shown overall bullish trends over the past year, recent performance indicates a decline in both, with NET exhibiting higher volatility than OKTA.
Analyst Opinions
Recent analyst recommendations for Cloudflare, Inc. (NET) indicate a cautious stance, with a rating of D+. Analysts highlight concerns about low scores in various financial metrics, suggesting a hold or sell position. In contrast, Okta, Inc. (OKTA) enjoys a more favorable rating of B+, with analysts like those from Morningstar advocating a buy. They cite strong discounted cash flow scores and solid fundamentals as key drivers. Overall, the consensus for OKTA leans toward buy, while NET is viewed with skepticism, leaning towards sell.
Stock Grades
I have reviewed the latest stock grades for two notable companies: Cloudflare, Inc. (NET) and Okta, Inc. (OKTA). Here’s a summary of their current ratings from established grading companies.
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 |
| Cantor Fitzgerald | Maintain | Neutral | 2025-10-31 |
| UBS | Maintain | Neutral | 2025-10-31 |
| Stifel | Maintain | Buy | 2025-10-31 |
| Needham | Maintain | Buy | 2025-10-31 |
| Keybanc | Maintain | Overweight | 2025-10-31 |
| Citizens | Maintain | Market Outperform | 2025-10-31 |
| Mizuho | Maintain | Outperform | 2025-10-31 |
Okta, Inc. Grades
| Grading Company | Action | New Grade | Date |
|---|---|---|---|
| BTIG | Maintain | Buy | 2025-12-04 |
| BMO Capital | Maintain | Market Perform | 2025-12-03 |
| DA Davidson | Maintain | Buy | 2025-12-03 |
| Piper Sandler | Maintain | Neutral | 2025-12-03 |
| Susquehanna | Maintain | Neutral | 2025-12-03 |
| Needham | Maintain | Buy | 2025-12-03 |
| Canaccord Genuity | Maintain | Buy | 2025-12-03 |
| Scotiabank | Maintain | Sector Perform | 2025-12-03 |
| JP Morgan | Maintain | Overweight | 2025-12-03 |
| Cantor Fitzgerald | Maintain | Overweight | 2025-12-03 |
Overall, both companies maintain a positive outlook with several “Buy” ratings, particularly for Cloudflare and Okta, suggesting strong investor confidence. However, some grades remain neutral, indicating a cautious approach among certain analysts.
Target Prices
A consensus of target prices from reliable analysts provides valuable insights for potential investors.
| Company | Target High | Target Low | Consensus |
|---|---|---|---|
| Cloudflare, Inc. | 300 | 220 | 254.5 |
| Okta, Inc. | 140 | 60 | 108.47 |
The consensus target prices suggest that analysts have positive expectations for both Cloudflare and Okta, with potential upside compared to their current stock prices of $200.16 for Cloudflare and $85.69 for Okta.
Strengths and Weaknesses
The following table summarizes the strengths and weaknesses of Cloudflare, Inc. (NET) and Okta, Inc. (OKTA) based on recent data.
| Criterion | Cloudflare, Inc. (NET) | Okta, Inc. (OKTA) |
|---|---|---|
| Diversification | Moderate | High |
| Profitability | Negative | Positive |
| Innovation | High | Moderate |
| Global presence | Strong | Strong |
| Market Share | Growing | Established |
| Debt level | Moderate | Low |
Key takeaways: Cloudflare shows strong innovation and a growing market presence but struggles with profitability. Okta, on the other hand, has positive profitability and lower debt, indicating a more stable financial position.
Risk Analysis
The following table outlines key risks associated with Cloudflare, Inc. (NET) and Okta, Inc. (OKTA) to assist in evaluating their investment potential.
| Metric | Cloudflare, Inc. (NET) | Okta, Inc. (OKTA) |
|---|---|---|
| Market Risk | High | Moderate |
| Regulatory Risk | Moderate | Moderate |
| Operational Risk | High | High |
| Environmental Risk | Low | Low |
| Geopolitical Risk | Moderate | Low |
In summary, both companies exhibit high operational risks, particularly Cloudflare, which faces significant market volatility. Understanding these risks is crucial for making informed investment decisions.
Which one to choose?
When comparing Cloudflare, Inc. (NET) and Okta, Inc. (OKTA), both companies show distinct financial profiles. Cloudflare has a higher gross profit margin (77.3%) but struggles with negative net income margins, indicating challenges in profitability. In contrast, Okta presents a more balanced outlook with a net income margin of 1.0% and a solid rating of B+, reflecting stronger overall fundamentals.
From a valuation perspective, NET is trading at a significantly high P/E ratio of -466.5, while OKTA’s is at 570.6, suggesting that investors are pricing in aggressive growth expectations for both firms. The recent stock trends show that while NET has experienced a bullish trend with a 153.0% increase, it has faced recent price corrections, which adds to its volatility. OKTA’s growth has been modest at 2.2%.
For growth-oriented investors, I recommend considering Okta, while those focused on high growth potential might find Cloudflare appealing, albeit with higher associated risks.
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:
