Financial Analysis: Cloudflare (NYSE:NET) vs. CoreCard (NYSE:CCRD)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CoreCard	3.03%	4.87%	4.01%
Cloudflare	-6.90%	-8.54%	-2.42%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CoreCard	$52.43 million	2.23	$3.39 million	$0.30	47.67
Cloudflare	$1.48 billion	18.03	-$183.95 million	($0.53)	-147.92

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

Volatility & Risk

CoreCard has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500. Comparatively, Cloudflare has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for CoreCard and Cloudflare, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CoreCard	0	0	0	0	N/A
Cloudflare	3	12	10	0	2.28

Cloudflare has a consensus price target of $92.29, indicating a potential upside of 17.72%. Given Cloudflare’s higher probable upside, analysts clearly believe Cloudflare is more favorable than CoreCard.

Insider & Institutional Ownership

43.9% of CoreCard shares are owned by institutional investors. Comparatively, 82.7% of Cloudflare shares are owned by institutional investors. 17.2% of CoreCard shares are owned by insiders. Comparatively, 12.8% of Cloudflare shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

CoreCard beats Cloudflare on 7 of the 13 factors compared between the two stocks.

About CoreCard

CoreCard Corporation, together with its subsidiaries, offers technology solutions and processing services to the financial technology and services market in the United States, Europe, and the Middle East. It designs, develops, and markets a suite of software solutions to program managers, accounts receivable businesses, financial institutions, retailers, and processors to manage their credit and debit cards, prepaid cards, private label cards, fleet cards, buy now pay later programs, loyalty programs, and accounts receivable and loan transactions. The company's software solutions allow companies to offer various types of transacting account or card issuing program, as well as installment and revolving loans; set up and maintain account data; record advances and payments; assess fees, interests, and other charges; resolve disputes and chargebacks; manage collections of accounts receivable; generate reports; and settle transactions with financial institutions and network schemes. The company was formerly known as Intelligent Systems Corporation and changed its name to CoreCard Corporation in December 2021. CoreCard Corporation was founded in 1973 and is headquartered in Norcross, Georgia.

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.