Cloudflare enters the back half of June with its options market more defensive than it has ever been in the past year — and the gap between options anxiety and a genuinely unbothered borrow market is wider than ever.
The options signal is the week's most striking development. The put/call ratio jumped to 0.7492 on Tuesday, a new 52-week high and nearly four standard deviations above its 20-day mean of 0.65. That z-score of 4.0 is exceptional — it sits well beyond the 3.7 reading flagged in the previous note, meaning the defensive tilt has not just persisted since the June 9 earnings drop, it has accelerated. The prior note noted that put demand intensified rather than unwound after that 11% single-day fall. This week it pushed to an extreme that has no parallel in the trailing twelve months.
The borrow market tells a sharply different story. Availability, at over 5,000% of short interest, is extraordinarily loose — there are roughly fifty lendable shares for every one currently borrowed. Cost to borrow is a negligible 0.47%, up 6% on the week but still near the bottom of its 30-day range. Short interest itself is a modest 2.8% of the free float, barely changed over the past month and essentially flat on the week. Shorts are not building. The squeeze dynamic that might justify the options defensiveness is simply absent from the lending market.
The Street, meanwhile, remains broadly constructive. A cluster of target raises arrived on June 10, with Truist lifting to $250 from $225, RBC to $260, Mizuho to $260, Needham to $280, and BTIG to $269. Citizens reiterated a $270 target as recently as June 15. The mean target now stands at $243, modestly above the current price of $224.94. The outlier is Guggenheim, which holds a lone Sell and a $140 target — a level that looks increasingly stranded relative to the consensus. On valuation, the stock trades at a P/E above 160x and an EV/EBITDA above 100x, which the EPS-momentum factor scores (80th percentile on both 30-day and 90-day windows) do something to justify. Forward EPS estimates rank in the 97th percentile for year-on-year increase — the growth story is not in question.
Institutional ownership adds one note of caution. Co-founder and President Michelle Zatlyn sold roughly $5.5 million of stock across multiple tranches on June 18, adding to a prior sale on June 17. CFO Thomas Seifert, who separately announced his resignation earlier in June, also sold $739,000 on June 17. Individually, founder-level sales are rarely alarming. Together with the CFO departure, they give the insider tape a less comfortable tone heading into a leadership transition.
The next earnings date is August 6. With the June print having produced an 11% one-day drop and a near 20% five-day loss in May, the stock's recent history around results is notably volatile. The question heading into August is whether the widening gap between options-market anxiety and a complacent borrow market closes — and which side moves to meet the other.
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