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Quantum Corporation (QMCO)
NASDAQ:QMCO
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Quantum
(NASDAQ:QMCO)
43Neutral
Positive Factors
Financial Position
Quantum plans to use its $200M standby equity purchase agreement to reduce debt, which could strengthen its financial position.
Gross Margin
The company's gross margin expanded by 230 basis points, driven by a favorable mix shift and successful sales of higher value data storage systems.
Revenue Growth
Quantum posted its first year-over-year quarterly revenue growth in seven quarters, showing signs of fundamental improvement.
Negative Factors
Debt and Spending
Net debt jumped to $108M from $83M, with significant spending on restructuring charges, debt workouts, and compliance.
Demand
The company cited softer-than-expected demand for enterprise data protection systems, especially in its U.S. market, for its substantial FY25 revenue reset.
Revenue Guidance
Quantum expects a slight contraction in revenue for Q4'25, despite recent growth.
Quantum (QMCO) vs. S&P 500 (SPY)
Market Cap
$73.23M
Dividend YieldN/A
Average Volume (3M)1.57M
Price to Earnings (P/E)―
Beta (1Y)2.35
Revenue Growth-17.08%
EPS Growth-223.70%
CountryUS
Employees770
SectorTechnology
Sector Strength51
IndustryComputer Hardware
Share Statistics
EPS (TTM)-25.68
Shares Outstanding6,526,782
10 Day Avg. Volume668,584
30 Day Avg. Volume1,571,526
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.34
Price to Cash Flow (P/CF)-7.70
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$19.00Price Target Upside69.34% Upside
Rating ConsensusHold
Number of Analyst Covering2
Quantum Business Overview & Revenue Model
Company DescriptionQuantum Corporation (QMCO) is a leading provider of innovative solutions for capturing, managing, and storing digital data. The company operates primarily in the data management and storage industry, offering a range of products and services including high-performance data storage systems, scale-out storage solutions, and data protection and recovery services. Quantum's solutions are designed to address the complex needs of large-scale data environments, serving sectors such as media and entertainment, government, education, and cloud providers.
How the Company Makes MoneyQuantum Corporation generates revenue through the sale of its data storage and management solutions, which include hardware, software, and services. Key revenue streams include product sales, which encompass both primary storage systems and backup systems, as well as recurring revenue from maintenance and support services. The company also earns income from professional services that assist customers in deploying and optimizing their data storage solutions. Strategic partnerships with technology companies and cloud service providers enhance Quantum's market presence and contribute to its revenue growth. The company focuses on sectors with significant data storage needs, leveraging its expertise in data protection, archiving, and high-performance storage to drive sales.
Quantum Financial Statement Overview
Summary
Quantum is struggling with profitability, financial stability, and cash flow management. Persistent losses, high debt, and negative equity pose significant risks. Strategic focus on revenue growth and cost management is needed.Income Statement
Quantum has faced significant challenges in maintaining profitability. The gross profit margin for TTM is approximately 40.04%, but the company has been unable to translate this into net profits, as indicated by a net profit margin of -43.62%. EBIT and EBITDA margins are also negative, highlighting operational inefficiencies. Revenue has been decreasing, indicating a need for strategic shifts to stimulate growth.35
Negative
Balance Sheet
The balance sheet reveals a concerning financial structure. The company's stockholders' equity is negative, showing a debt-heavy configuration. The debt-to-equity ratio cannot be computed due to negative equity, but the high total liabilities and negative equity ratio indicate financial instability. The return on equity is also negative due to persistent net losses.25
Negative
Cash Flow
Cash flow analysis shows cash management difficulties. Both operating and free cash flows are negative, suggesting potential liquidity issues. The free cash flow to net income ratio is undefined due to negative free cash flow, and the operating cash flow to net income ratio is also negative. These metrics suggest challenges in sustaining operations without external financing.30
Negative
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 285.86M | 311.60M | 412.75M | 372.83M | 349.58M | 402.95M | Gross Profit |
| 114.49M | 124.89M | 133.94M | 147.03M | 150.75M | 172.51M | EBIT |
| -1.19M | -28.88M | -26.01M | -13.84M | 8.40M | 21.20M | EBITDA |
| -97.89M | -16.17M | 4.25M | -9.63M | -2.00M | 26.51M | Net Income Common Stockholders |
| -124.72M | -41.29M | -37.94M | -32.28M | -35.46M | -5.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 25.86M | 25.69M | 25.96M | 5.21M | 27.43M | 6.44M | Total Assets |
| 187.62M | 187.62M | 213.66M | 201.63M | 194.92M | 166.00M | Total Debt |
| 119.98M | 119.98M | 99.64M | 123.18M | 100.75M | 164.99M | Net Debt |
| 94.12M | 94.28M | 73.67M | 117.97M | 73.31M | 158.55M | Total Liabilities |
| 309.11M | 309.11M | 300.55M | 328.32M | 307.17M | 364.52M | Stockholders Equity |
| -121.50M | -121.50M | -86.89M | -126.68M | -112.25M | -198.53M |
| Cash Flow | Free Cash Flow | ||||
| -14.94M | -16.02M | -17.48M | -40.04M | -7.70M | -3.81M | Operating Cash Flow |
| -9.77M | -10.16M | -4.89M | -33.73M | -767.00K | -1.18M | Investing Cash Flow |
| -5.17M | -5.87M | -15.60M | -14.12M | -9.59M | -4.60M | Financing Cash Flow |
| 10.99M | 15.71M | 41.16M | 20.16M | 31.33M | 1.21M |
Quantum Technical Analysis
Negative
11.22
Price Trends
15.26
Negative
22.06
Negative
13.65
Negative
Market Momentum
-0.69
Negative
44.09
Neutral
11.48
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QMCO, the sentiment is Negative. The current price of 11.22 is below the 20-day moving average (MA) of 14.68, below the 50-day MA of 15.26, and below the 200-day MA of 13.65, indicating a bearish trend. The MACD of -0.69 indicates Negative momentum. The RSI at 44.09 is Neutral, neither overbought nor oversold. The STOCH value of 11.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for QMCO.
Quantum Risk Analysis
Quantum disclosed 36 risk factors in its most recent earnings report. Quantum reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Quantum Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $16.98B | 15.23 | 114.33% | 2.49% | 5.46% | 23.49% | |
67 Neutral | $18.57B | 7.00 | 12.09% | 3.68% | 10.93% | 43.19% | |
65 Neutral | $14.85B | 12.84 | -109.27% | 4.05% | 24.17% | ― | |
64 Neutral | $12.13B | 8.21 | 13.99% | ― | 38.59% | ― | |
63 Neutral | $57.17B | 12.85 | -179.12% | 2.17% | 7.84% | 42.63% | |
57 Neutral | $19.95B | 9.66 | -12.05% | 2.76% | 5.40% | -24.89% | |
43 Neutral | $73.23M | ― | 33.98% | ― | -17.08% | -223.70% |
* Technology Sector Average
Performance Comparison
QMCO
Quantum
11.22
2.88
34.53%
NTAP
NetApp
82.64
-17.79
-17.71%
STX
Seagate Tech
70.15
-11.34
-13.92%
WDC
Western Digital
34.40
-18.82
-35.36%
HPE
Hewlett Packard Enterprise
14.14
-2.65
-15.78%
DELL
Dell Technologies
81.93
-34.14
-29.41%
Quantum Earnings Call Summary
Earnings Call Date: Feb 12, 2025 | % Change Since: -51.70% | Next Earnings Date: Jun 4, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant strides in revenue growth, EBITDA improvement, and transition to a subscription model. Large customer wins and strategic financial moves were positive indicators. However, challenges remain with a significant GAAP net loss and ongoing supply chain issues. Efforts to reduce debt and improve operational efficiency are ongoing.Highlights
Revenue and EBITDA Growth
Q3 2025 revenue of $72.6 million, up 3% quarter-over-quarter and 1% year-over-year. Adjusted EBITDA was positive $4.7 million, an improvement of $5 million sequentially and $7.3 million year-over-year.
Transition to Subscription Model
Subscription ARR increased by 29% year-over-year to $21.3 million, with over 90% of new sales on subscription.
Secondary Storage Revenue Growth
Secondary storage revenue grew 15% year-over-year, driven by the new DXi data protection appliances.
Large Customer Wins
Secured a multimillion-dollar deal with a top European retailer and a major American multinational technology manufacturer.
Strategic Financial Moves
Entered a standby equity purchase agreement with Yorkville Advisors to improve liquidity and reduce debt.
Federal Sector Growth
US Federal sector revenue up 54% year-over-year, marking the best performance since fiscal 2022.
Lowlights
GAAP Net Loss
Reported a GAAP net loss of $71.4 million, including a non-cash charge of $61.6 million related to warrant liabilities.
Supply Chain and Manufacturing Challenges
Extended supply chain lead times and concerns about tariffs and geopolitical issues impacting manufacturing.
Debt Levels
Outstanding debt of $143.4 million with a net debt position of $133 million.
Company Guidance
During Quantum Corporation's fiscal third quarter 2025 earnings call, the company reported $72.6 million in revenue, marking a 1% year-over-year increase and a 3% rise from the previous quarter. The GAAP gross margin expanded by 320 basis points year-over-year to 43.8%. Additionally, the adjusted EBITDA reached $4.7 million, a $5 million sequential improvement. Subscription annual recurring revenue (ARR) increased by 29% year-over-year to $21.3 million, with over 90% of new sales being subscription-based. The company achieved a 6% year-over-year reduction in non-GAAP operating expenses and noted a significant debt reduction strategy, including a standby equity purchase agreement to enhance liquidity. Notable business wins included a large U.S. federal deal and substantial sales in secondary storage driven by new DXi data protection appliances, contributing to the company's ongoing transformation and growth initiatives.Quantum Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Quantum Appoints New CFO and Director in 2025
Positive
Apr 3, 2025
Quantum Corporation announced the appointment of Lewis W. Moorehead as Chief Financial Officer effective April 4, 2025, succeeding Kenneth P. Gianella. Mr. Moorehead has been with the company since 2018, previously serving as Vice President of Finance and Treasurer. Additionally, John A. Fichthorn was appointed as a director effective April 3, 2025, following Todd W. Arden’s resignation. These leadership changes are expected to strengthen Quantum’s strategic direction and governance.
Executive/Board Changes
Quantum Corporation Board Member Resignation in March 2025
Neutral
Mar 20, 2025
On March 19, 2025, Christopher D. Neumeyer resigned from the Board of Directors of Quantum Corporation. His resignation was not due to any disagreements with the company’s operations or policies. Neumeyer is affiliated with Pacific Investment Management Company LLC (PIMCO), which maintains its lending relationship and board observation rights with Quantum.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.