QUBT Is Riding the Quantum Wave, But What’s the Story with the Crazy Valuation?

Quantum Computing Inc. (QUBT) is creating some noise, making the most of the quantum computing industry surge in 2024. The field has seen breakthroughs that were once the stuff of science fiction, and QUBT is right in the midst of it. From quantum chemistry advancements to less inclined computing errors, 2024 has been a turning point for the new-born quantum industry. Tech giants like IBM (IBM) and Google (GOOG) certainly lead the way when it comes to the public and investors’ attention. Still, much smaller companies have also enjoyed this year’s spark of quantum ingenuity. QUBT is one of the veteran companies in the field. It was founded in 2001 with a mission of democratizing quantum power and making it accessible to everyone.

Here, we explore the company’s financials, technological advancements in recent years, future plans, and Tipranks’ Smart Score regarding its near-term prospects.

Let’s get into it, then!

• Financial Performance: Quantum Computing Inc. has had quite the financial journey in 2024. For the third quarter, it reported revenues of about $101,000, up from $50,000 in 2023. Yet, they still faced a net loss of $5.7 million for the quarter. For the full fiscal year, revenues doubled to $400,000 from $200,000 in 2023, but the net loss stood at $22.5 million. Cash and cash equivalents rose to $3.1 million by year-end, showing cautious but positive cash flow management. All in all, the numbers look reasonable when considering the company’s enterprise operation of less than $790 million. The thing is, its P/S ratio of over 4,000 (depending on where your data comes from) is insane, with the industry average of 3.27. Of course, this suggests strong expectations, but maybe just a tad too much.

• Technological Achievements and Collaborations: QUBT has been busy on the tech front. They’ve developed proprietary quantum algorithms and launched Qatalyst, a cloud-based platform democratizing access to quantum resources. Strategic partnerships are also a big part of its game plan. Collaborations with Spark Photonics Design, Inc. and Alcyon Photonics aim to advance photonic integrated circuits and process design kits. Its extended agreement with Los Alamos National Laboratory focuses on the Dirac-3 quantum optimization machine, enhancing capabilities in solving complex problems. These moves highlight QUBT’s devotion to leverage external expertise and drive further advancements.

• Near-term and Long-Term Prospects: According to the company’s management, QUBT aims to expand its quantum cloud services, boost revenue in the near term, and manage expenses to achieve profitability. It also focuses on developing quantum-resistant cryptographic solutions for future data security challenges. Quantum computing is destined to cause security volatility in the current encrypted method designed to protect sensitive information. QUBT is acting on this quantum front as well.

• Tipranks’ Smart Score: Quantum Computing Inc. has a TipRanks Smart Score of 9, meaning an Outperform rating. Bloggers are positive about the company, giving it a 90% favorable rating, compared to 69% for the sector average. Crowd sentiment is strong, with a 16.2% increase in interest over the past 7 days and a 145.6% increase over the past 30 days. Technical signs show positive growth, with a 730.85% increase in momentum over the past year. However, the company’s fundamentals reveal a decline in asset growth of -14.02% over the last year.

Final Assessment

Quantum Computing Inc. possesses a novel technology, strategic partnerships, and a clear vision to democratize quantum computing. While the company isn’t profitable yet, its advancements and collaborations position it well for the long term in the rapidly evolving quantum computing industry. Like most small-caps companies in this coming-to-life sector, QUBT is also speculative in nature, as there’s still a long road ahead. The company’s valuation is also speculative if not wishful thinking.