Head to Head Review: Cloudflare (NYSE:NET) versus BILL (NYSE:BILL)

BILL (NYSE:BILL) and Cloudflare (NYSE:NET) are both computer and technology companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, earnings, risk, profitability, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares BILL and Cloudflare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BILL	0.01%	2.40%	0.91%
Cloudflare	-3.72%	-5.84%	-1.36%

Risk and Volatility

BILL has a beta of 1.22, meaning that its stock price is 22% more volatile than the S&P 500. Comparatively, Cloudflare has a beta of 1.67, meaning that its stock price is 67% more volatile than the S&P 500.

Institutional and Insider Ownership

98.0% of BILL shares are owned by institutional investors. Comparatively, 82.7% of Cloudflare shares are owned by institutional investors. 13.2% of BILL shares are owned by company insiders. Comparatively, 10.9% of Cloudflare shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for BILL and Cloudflare, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BILL	1	9	12	1	2.57
Cloudflare	3	7	19	0	2.55

BILL presently has a consensus price target of $56.35, suggesting a potential upside of 35.62%. Cloudflare has a consensus price target of $233.12, suggesting a potential upside of 18.60%. Given BILL’s stronger consensus rating and higher probable upside, equities analysts clearly believe BILL is more favorable than Cloudflare.

Earnings and Valuation

This table compares BILL and Cloudflare”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BILL	$1.46 billion	2.81	$23.80 million	($0.01)	-4,155.10
Cloudflare	$2.17 billion	31.91	-$102.27 million	($0.25)	-786.22

BILL has higher earnings, but lower revenue than Cloudflare. BILL is trading at a lower price-to-earnings ratio than Cloudflare, indicating that it is currently the more affordable of the two stocks.

Summary

BILL beats Cloudflare on 10 of the 15 factors compared between the two stocks.

About BILL

BILL Holdings, Inc. provides financial automation software for small and midsize businesses worldwide. The company provides software-as-a-service, cloud-based payments, and spend management products, which allow users to automate accounts payable and accounts receivable transactions, as well as enable users to connect with their suppliers and/or customers to do business, eliminate expense reports, manage cash flows, and improve office efficiency. It also offers onboarding implementation support, and ongoing support and training services. In addition, the company's artificial intelligence enabled software provides connections between suppliers and clients. It serves accounting firms, financial institutions, and software companies. The company was formerly known as Bill.com Holdings, Inc. and changed its name to BILL Holdings, Inc. in February 2023. BILL Holdings, Inc. was incorporated in 2006 and is headquartered in San Jose, California.

About Cloudflare

Cloudflare, Inc. operates as a cloud services provider that delivers a range of services to businesses worldwide. The company provides an integrated cloud-based security solution to secure a range of combination of platforms, including public cloud, private cloud, on-premise, software-as-a-service applications, and IoT devices; and website and application security products comprising web application firewall, bot management, distributed denial of service, API gateways, SSL/TLS encryption, script management, security center, and rate limiting products. It offers website and application performance solutions, including content delivery, load balancing, DNS, agro smart routing, video stream delivery, web optimization, cache reserve, cloudfare waiting room, and cloudfare data localization suite; SASE platform through cloudfare one that provides a cloud-based network-as-a-service; network services which deliver network connectivity, security, and performance, including magic WAN, magic transit, magic firewall, cloudflare network interconnect, and spectrum. In addition, the company provides zero trust services, such as cloudflare access, cloudflare gateway, remote browser isolation, cloud access security broker, cloud email security, and data loss prevention products that protects, inspects, and provides privilege rules to grant access to data and application. Further, it provides developer-based solutions consisting of cloudflare workers, R2 object storage, workers KV, durable objects, cloudfare pages, cloudfare stream, and cloudfare images; and consumer products comprising of 1.1.1.1, a DNS resolver, WARP, a virtual private network, and cloudfare registrar that secures registration and management of domain names. The company serves customers in the technology, healthcare, financial services, consumer and retail, industrial, and non-profit industries, as well as government. Cloudflare, Inc. was incorporated in 2009 and is headquartered in San Francisco, California.