Recommendation: Buy
| Entry Date | Symbol | Recommendation | Entry Price (USD) | Target 1 (USD) | Target 2 (USD) | Holding Duration | Potential Upside* |
|---|---|---|---|---|---|---|---|
| 1 May, 25 | QUBT | Buy | USD 6.74 | USD 7.25 | USD 7.8 | 3 days | 15.7% |
*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.
Gross Margin Expansion: Gross margin improved from 13% in Q4 2023 to 55% in Q4 2024, signaling more efficient cost management and product margin potential
Cash Position Strengthened: Cash and cash equivalents increased by $76.9 million year-over-year, reaching $78.9 million by the end of 2024
Operating Expenses Growth: Operating expenses increased by $2.3 million year-over-year, reaching $8.9 million in Q4 2024, driven by higher stock-based compensation and equipment depreciation
Net Loss Surge: The net loss rose sharply to $51.2 million in Q4 2024 from $6.8 million in Q4 2023, primarily due to non-cash warrant-related charges
The company faces material investor risk due to substantial non-cash volatility in its financial statements stemming from warrant-related derivative liabilities, which may obscure underlying operational performance and affect investor confidence
| Entry Price | Support* | Target 1 | Target 2 |
|---|---|---|---|
| 6.74 | 5.9 | 7.25 | 7.8 |
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.
Operational Progress and Strategic Direction
The company remains on schedule to launch its Quantum Photonic Chip Foundry in early 2025. With multiple purchase orders already secured, this development underlines the rising demand for thin film lithium niobate (TFLN)-based photonic integrated circuits. Strategic collaborations, such as those with NASA, further validate the company's Dirac-3 quantum optimization machine and its practical applications. Looking ahead, management is focused on advancing its growth strategy, deepening industry collaborations, and delivering next-generation quantum and photonic technologies to market.
Fourth Quarter 2024 Financial Overview
For the fourth quarter of 2024, the company reported revenues of approximately $62,000, down from $75,000 in the same period in 2023. However, gross margin improved significantly to 55%, up from 13% in the prior year, driven primarily by reduced costs of goods sold. Operating expenses increased to $8.9 million, compared to $6.6 million in Q4 2023, mainly due to elevated non-cash stock-based compensation and higher depreciation costs related to the Tempe, Arizona foundry.
Net Loss and Derivative Liability Impact
The company recorded a net loss attributable to common stockholders of $51.2 million, or $(0.47) per basic share in Q4 2024, a substantial increase from the $6.8 million net loss or $(0.09) per share reported in Q4 2023. This significant increase in net loss was largely due to non-cash charges associated with the mark-to-market valuation of warrant-related derivative liabilities following the QPhoton merger in June 2022.
Balance Sheet Strength and Capital Raise Activities
As of December 31, 2024, total assets stood at $153.6 million, more than doubling from $74.4 million at the end of 2023. The company’s cash and cash equivalents rose by $76.9 million to $78.9 million, supported by $92.1 million in net proceeds from common stock offerings during the quarter. Subsequent to year-end, the company announced an additional $100 million gross offering. Total liabilities increased to $46.3 million, primarily due to the QPhoton warrant accounting adjustments, while shareholders’ equity reached $107.3 million.
Operational Highlights and Customer Engagement
Operationally, the company reached the final commissioning stage for its Quantum Photonic Chip Foundry. Construction is largely completed, and process design kits (PDKs) are being finalized as customer orders are fulfilled. The quarter also saw the signing of two memorandums of understanding with Spark Photonics Design and Alcyon Photonics, broadening collaborative opportunities. Through the 2024 Pilot Launch Program, the company secured five purchase orders, underscoring strong market interest ahead of the Foundry's operational launch in early 2025.
Growth in Market Presence and Quantum Innovation
To bolster its market footprint, the company participated in ten trade shows and conferences, showcasing its photonic and quantum optimization technologies to prospective clients and partners. Additionally, the CEO presented at the Quantum Frontiers Conference at Los Alamos National Laboratory, highlighting the practical deployment of the Dirac-3 quantum computer for commercial and government uses. These initiatives reflect the company’s effort to bridge the gap between emerging quantum technologies and their real-world application.
Considering recent key business, financial updates, current trading levels, and key business risks, a ‘Buy’ recommendation has been given on Quantum Computing Inc (NASDAQ: QUBT) at the closing market price of USD 6.74, as on April 30, 2025.
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”).
Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are 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.
Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is April 30,2025. The reference data in this report has been partly sourced from REFINITIV.
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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