** Software firm Cloudflare NET.N is benefiting from relentless innovation, strong management and market leadership, Morgan Stanley says

** Brokerage raises PT to $225 from $150, implying ~24% upside to stock's last close

** Cloudflare leads in internet traffic and security, delivers strong financial results, and is becoming more adaptable through enterprise sales and flexible, usage-based contracts - brokerage

** Morgan Stanley calls Cloudflare a "Best Athlete" in software

** Co recently launched a tool that blocks bot crawlers from accessing website content without permission or compensation

** NET's main risks are its premium valuation vs peers, rising competition from hyperscalers and security vendors - brokerage

** 21 of 35 brokerages rate the stock "buy" or higher, 12 "hold" and 2 "sell" or lower; their median PT is $154 - LSEG-compiled data

** NET shares down 0.5% at $181.00 premarket; as of last close, stock up ~69% this year

(Reporting by Jaspreet Singh in Bengaluru)

((Jaspreet.Singh@thomsonreuters.com ; https://twitter.com/i_jass))