Head to Head Analysis: AvidXchange (NASDAQ:AVDX) vs. Cloudflare (NYSE:NET)

AvidXchange (NASDAQ:AVDX) and Cloudflare (NYSE:NET) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, risk, valuation, earnings, institutional ownership and dividends.

Analyst Recommendations

This is a breakdown of current ratings and price targets for AvidXchange and Cloudflare, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AvidXchange	2	10	4	0	2.13
Cloudflare	3	10	14	0	2.41

AvidXchange currently has a consensus target price of $10.07, suggesting a potential upside of 28.07%. Cloudflare has a consensus target price of $134.84, suggesting a potential upside of 11.41%. Given AvidXchange’s higher possible upside, analysts clearly believe AvidXchange is more favorable than Cloudflare.

Insider & Institutional Ownership

80.6% of AvidXchange shares are owned by institutional investors. Comparatively, 82.7% of Cloudflare shares are owned by institutional investors. 10.4% of AvidXchange shares are owned by company insiders. Comparatively, 12.8% of Cloudflare shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares AvidXchange and Cloudflare”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AvidXchange	$438.94 million	3.66	-$47.33 million	$0.04	196.50
Cloudflare	$1.67 billion	25.01	-$78.80 million	($0.22)	-550.14

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

Risk and Volatility

AvidXchange has a beta of 1.14, suggesting that its stock price is 14% more volatile than the S&P 500. Comparatively, Cloudflare has a beta of 1.59, suggesting that its stock price is 59% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
AvidXchange	-0.23%	0.74%	0.23%
Cloudflare	-4.72%	-5.52%	-1.67%

About AvidXchange

AvidXchange Holdings, Inc. provides accounts payable (AP) automation software and payment solutions for middle market businesses and their suppliers in North America. The company offers AP automation software, a SaaS-based solution that automates and digitizes capture, review, approval, and payment of invoices for buyers; the AvidPay network that connects two-sided payments with buyers and suppliers; and the AvidXchange Supplier Hub, which provides supplier insights to cash flow, tools for in-network invoices and payments, and early payment feature. Its platform offers electronic invoice capture, workflow routing, and automated payments solutions. The company serves real estate, community association management, construction, financial services, healthcare facilities, social services, education, hospitality, and media sectors through direct salesforces; strategic channel partnerships; and software and technology business partners. AvidXchange Holdings, Inc. was incorporated in 2000 and is headquartered in Charlotte, North Carolina.

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.