Cloudflare just got a vote of confidence from BTIG, and the reasoning is the fun part: the analyst did the homework. BTIG's Gray Powell raised his price forecast for Cloudflare (NYSE: NET) from $382 to $413 while keeping a Buy rating, pointing to stronger growth and product momentum at the company.

Powell and his team talked to several Cloudflare contacts and industry analysts, including three partners and four industry analysts. The feedback was broadly positive, which is the kind of sentence that usually hides a caveat. Here, the caveat is small.

The Partner Checks Look Strong

The largest partner reported 40%-50% year-to-date growth, accelerating to the high 70% range in September, versus 40% previously. Another contact reported about 26% growth over the past three to four quarters and expects 28% growth by the fourth quarter.

A European distributor expanded its Cloudflare agreement and said the company is gaining market share and strengthening its enterprise presence.

The only cautious view came from a Secure Access Service Edge (SASE) analyst, who cited challenges in moving upmarket due to Cloudflare's historical focus on smaller customers and cloud-only model. That's the bear case in one sentence, and it's not nothing, but it's also not new.

The Street Expects Double-Digit Growth

The Street expects fiscal third-quarter revenue of $737 million, up 31.1% year over year, while Powell sees upside to $760 million, or 35.2% growth.

Under that scenario, fourth-quarter revenue could reach about $800 million, up 30.2%, versus the $796 million Street estimate, the analyst adds.

Earnings Preview and Analyst Price Targets

Looking further out, the next major catalyst for the stock arrives with the Oct. 29 (estimated) earnings report.

• EPS Estimate: 34 cents (Up from 27 cents year-over-year)
• Revenue Estimate: $737.95 million (Up from $562.03 million YoY)

Analyst Consensus & Recent Actions: The stock carries a Buy rating with an average price forecast of $335.20. Recent analyst moves include:

• Bernstein: Market Perform (Raises target to $181 on Sept. 17)
• Citizens: Market Outperform (Maintains target to $394 on Aug. 31)

Cloudflare Price Action on Wednesday

Cloudflare shares were down 1.77% at $348.72 at the time of publication on Wednesday, according to market data.