Recommendation: Speculative Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 23 Apr, 25 | QUBT | Speculative Buy | USD 6.53 | USD 6.9 | USD 7.3 | Same day | 11.8% |
*Potential Upside (%) indicates the expected percentage increase from the Entry Price to the Target 2 Price.
Data Powered by EOD Historical Data (“EODHD”).
Quantum Computing Inc., an integrated photonics company, offers accessible and affordable quantum machines. The company offers Dirac systems are portable, low power, and room temperature qubit and qudit entropy quantum computers (EQC); reservoir computing; remote sensing; and single photon imaging. It also provides Quantum random number generator (uQRNG), a portable device that provides genuine random numbers directly from quantum processes; and quantum authentication which eliminates vulnerabilities inherent in classical cryptographic schemes by offering a comprehensive entanglement-based quantum cyber solution that seamlessly integrates into existing telecom fiber and communication infrastructure. The company was formerly known as Innovative Beverage Group Holdings, Inc. Quantum Computing, Inc. was incorporated in 2018 and is based in Hoboken, New Jersey.
Cash Position Strengthened: The company’s cash and equivalents grew by $76.9 million year-over-year, reaching $78.9 million at year-end 2024
Gross Margin Improvement: Gross margin increased significantly from 13% in Q4 2023 to 55% in Q4 2024, indicating better cost management and pricing power
Net Loss Surge: Net loss widened sharply to $51.2 million in Q4 2024, compared to $6.8 million in Q4 2023, primarily due to non-cash derivative charges
Revenue Decline: Quarterly revenues decreased from $75,000 in Q4 2023 to $62,000 in Q4 2024, indicating a short-term drop in sales volume
The company faces significant investment risk due to ongoing high operating losses and financial exposure to complex non-cash liabilities, including those related to warrant derivatives from past mergers
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 6.53 | 5.9 | 6.9 | 7.3 |
Data Source: REFINITIV, Analysis: StockNextt
*Support can be considered as an indicative stop-loss, and if prices move below that level on closing basis individuals may evaluate exiting the position depending on their risk appetite, previous holdings, and other factors considered. The support and resistance levels may need to be re-evaluated within 4-6 weeks’ time frame depending on the stock price movements from the date of recommendation on the stock.
Strategic Progress in Quantum and Photonic Technologies
The company remains on schedule to launch its Quantum Photonic Chip Foundry in the first quarter of 2025. This strategic milestone is supported by the securing of multiple purchase orders, reflecting strong and growing market demand for thin-film lithium niobate (TFLN)-based photonic integrated circuits. Through this development, the company aims to strengthen its technological leadership in the photonic sector while broadening its customer base and commercial readiness.
Expanding Collaborations with NASA
Demonstrating the practical applicability of its quantum computing technologies, the company has continued to expand its partnership with NASA. In the fourth quarter, the company secured its fifth task order with NASA to develop quantum remote sensing technologies for use in spaceborne LiDAR missions. Additionally, NASA awarded a contract to utilize the company’s Dirac-3 quantum optimization machine in phase unwrapping for complex data processing. These engagements underscore the increasing adoption of the company’s quantum solutions in high-impact, real-world applications.
Operational Enhancements and Market Outreach
Operational momentum was reinforced through the advancement of strategic industry partnerships and an expanded market presence. The company signed memorandums of understanding with Spark Photonics Design and Alcyon Photonics, which will help enhance its foundry capabilities and customer reach. Furthermore, participation in ten industry trade shows and conferences during the quarter helped elevate its profile and foster new customer and government relationships.
Financial Performance and Revenue Trends
Fourth quarter 2024 revenue totaled approximately $62,000, down from $75,000 in the same quarter of 2023. However, the gross margin improved significantly from 13% to 55%, primarily due to lower costs of goods sold. Operating expenses increased to $8.9 million from $6.6 million in the prior year’s fourth quarter, largely attributed to higher non-cash employee compensation and increased depreciation related to new production equipment at the TFLN chip foundry.
Net Loss and Capital Position
The company reported a net loss attributable to common stockholders of $51.2 million, or $(0.47) per basic share, compared to a loss of $6.8 million, or $(0.09) per share, in Q4 2023. This increase in net loss was primarily driven by non-cash charges related to the mark-to-market adjustment of warrant-related derivative liabilities, stemming from the QPhoton merger. Despite the increased loss, the company significantly strengthened its liquidity position, ending 2024 with $78.9 million in cash and cash equivalents, supported by $92.1 million in equity financing during the quarter.
Balance Sheet Expansion and Equity Growth
As of December 31, 2024, total assets more than doubled to $153.6 million from $74.4 million at the end of 2023. Total liabilities rose to $46.3 million, primarily due to accounting adjustments linked to QPhoton warrants. Shareholders’ equity also saw a notable increase to $107.3 million. Following quarter-end, the company announced an additional common stock offering, expected to generate gross proceeds of $100 million, further enhancing its financial flexibility.
Technical Commentary:
QUBT's stock price is demonstrating resilience at its support levels and has edged higher, suggesting the potential for continued upward momentum in the near future. The 14-period RSI is approaching the midpoint, which adds to the positive outlook. Furthermore, the stock is currently trading below both its 21-day and 50-day Simple Moving Averages, suggesting it may regain these levels in the near term.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given to Quantum Computing, Inc. (NASDAQ: QUBT) at its current market price of USD 6.53 as of April 23, 2025 (7:35 am PDT).
Data Powered by EOD Historical Data (“EODHD”).
Sector: Technology Industry: Computer Hardware
| Company | Change (USD) | Price (USD) | Trailing PE (x) | Forward PE (x) | Price Sales TTM (x) | Price to Book Value (x) | Enterprise Value to Revenue (x) | Enterprise Value to EBITDA (x) |
|---|---|---|---|---|---|---|---|---|
| QUBT Quantum Computing Inc |
-0.825 7.17% | 10.69 | - | - | 195.83 | 0.95 | 197.49 | -2.832 |
| DELL Dell Technologies Inc |
-0.36 0.32% | 113.87 | 17.90 | 12.25 | 0.83 | 4.39 | 1.05 | 10.50 |
| ANET Arista Networks |
-1.71 1.79% | 93.96 | 39.49 | 31.45 | 13.08 | 11.15 | 12.18 | 31.54 |
| SMCI Super Micro Computer Inc |
-0.082 0.19% | 42.69 | 49.25 | 28.90 | 5.69 | 17.11 | 5.65 | 57.68 |
| CAJFF Canon Inc |
- -% | 32.79 | 15.35 | 12.14 | 0.0071 | 1.35 | 1.14 | 7.50 |
Data Powered by EOD Historical Data (“EODHD”).
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Target: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Target 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Target 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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