Shares of the San Francisco company at last check were down 1.6% to $71.19.
Analyst Joel Fishbein, who raised his share-price target to $110 from $75, said he saw "many avenues for growth for the company with their best-in-class technology assets and unique global network."
Cloudflare's "competitive moat, large market opportunity, and scalable business model are key features that make this an attractive opportunity for investors long term," he said in an note.
Fishbein said his conversations with customers "indicate broad-based strength in [Cloudflare's] business, with newer solutions like Teams now starting to drive new customer growth in addition to increased upsell opportunity likely leading to upside to current consensus estimates."
Cloudflare is also seeing strong attach rates in the Workers product and solid expansion of customers in its core solutions, the analyst said.
Fishbein said a major architectural shift at the network layer is now under way. Cloudflare is leading the way, as the technology industry has undergone "a massive transition from on-premise hardware and software that customers buy, to services in the cloud that they rent."
The transition, the analyst said, "has swept through the application, compute, and storage layers of enterprise computing architectures."
"Organizations now exist in a complex, heterogeneous infrastructure environment," Fishbein said.
This worsens "the fundamental problems of the internet more than ever, and the on-premise boxes that they once relied upon to solve these problems were never designed to work in such an environment. Nor can a business ship an on-premise box to a cloud vendor."
Even if they wanted to, Fishbein said, "there is no place to install such a box in the cloud."
Last month, Cloudflare reported fourth-quarter results that exceeded Wall Street expectations.