No one's as good at covering Congressional Republicans as Robert Costa, so if he says Ted Cruz is seriously considering a run for president, it must be true -- which is not to say that it makes sense, or that he would win.
Why is Cruz a longshot? He's a first-term senator (yes, yes, exceptions and rules, etc.). He's probably too conservative even to win a GOP primary, but particularly to win a general election: Even his backers portray him as a latter-day Barry Goldwater, only somehow able to win. In just a few short months, he has managed to consistently alienate even his Republican colleagues -- which, whatever you think of the merits of Senate courtesy, won't help in a primary campaign (although he's also vice chair of the National Republican Senatorial Committee). David Frum paints a damned-if-he-can-raise-money, damned-if-he-can't scenario. Cruz even ran behind Mitt Romney in Texas last year, when both won handily. It's too early to see how the immigration bill that Cruz opposes will pan out; some Republicans fear that if it fails, the party will do even worse with Latinos, though Cruz's surname might dull the blow.
But what won't prevent Cruz from becoming president is his place of birth. Cruz was born in Calgary, Canada, while his parents were living there. His father is now an American citizen, but was not at the time; his mother, however, was born in the United States.
Helpfully, the Congressional Research Service gathered all of the information relevant to Cruz's case a few years ago, at the height (nadir?) of Obama birtherism. In short, the Constitution says that the president must be a natural-born citizen. "The weight of scholarly legal and historical opinion appears to support the notion that 'natural born Citizen' means one who is entitled under the Constitution or laws of the United States to U.S. citizenship 'at birth' or 'by birth,' including any child born 'in' the United States, the children of United States citizens born abroad, and those born abroad of one citizen parents who has met U.S. residency requirements," the CRS's Jack Maskell wrote. So in short: Cruz is a citizen; Cruz is not naturalized; therefore Cruz is a natural-born citizen, and in any case his mother is a citizen. You can read the CRS memo at bottom; here's a much longer and more detailed 2011 version.