Is the market paying more for companies that might build the quantum future, or for companies that may help secure the transition into it?
Cloudflare is not a quantum computer company. That is the point.
If Q-Day risk is moving closer, the migration layer may matter as much as the companies trying to build quantum computers. Cloudflare sits closer to the trust-chain side: internet security, network protection, identity, traffic, certificates, and enterprise infrastructure.
My fair value estimate for Cloudflare is about $200/share.
I use roughly $2.81B in 2026 revenue, about 30% annual revenue growth over the next five years, a 25% future net margin, a 45x future earnings multiple, a 10% required return, and roughly 375M diluted shares.
The reason I am not going higher yet is that post-quantum security may strengthen Cloudflare’s moat and customer trust, but it may not become a major standalone revenue line by itself. Cloudflare has said these upgrades are meant to be available by default, not treated like a separate premium add-on.
So my view is simple: Cloudflare may be one of the cleaner infrastructure names in the Q-Day conversation, but the stock already prices in a lot of quality.
I like the business more than the current valuation. For the stock to look clearly undervalued, I would want to see growth stay above 30% longer, margins expand cleanly, or security/PQC demand create stronger enterprise pull than I am modeling today.
Have other thoughts on Cloudflare?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeHow well do narratives help inform your perspective?
Disclaimer
The user DaneDruss holds no position in NYSE:NET. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
