Arqit Quantum (ARQQ) AI Stock Analysis

• Market Cap: $465.34M
• Dividend Yield: N/A
• Average Volume (3M): 490.01K
• Price to Earnings (P/E): ―
• Beta (1Y): 2.84
• Revenue Growth: 80.89%
• EPS Growth: 68.29%
• Country: US
• Employees: 82
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): -0.92
• Shares Outstanding: 15,292,167
• 10 Day Avg. Volume: 287,032
• 30 Day Avg. Volume: 490,015
• PEG Ratio: 0.03
• Price to Book (P/B): 2.44
• Price to Sales (P/S): 98.44
• P/FCF Ratio: -0.77
• Enterprise Value/Market Cap: 0.35
• Enterprise Value/Revenue: 476.21
• Enterprise Value/Gross Profit: -399.18
• Enterprise Value/Ebitda: -9.03
• 1Y Price Target: $60.00
• Price Target Upside: 118.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 46 Neutral
• Price Target: $46.00 ▲(67.39% Upside)

Arqit Quantum's overall stock score is primarily impacted by its poor financial performance, which is a significant concern. While there are some positive technical indicators and strategic wins, the company's financial health and valuation challenges weigh heavily on the score.

Positive Factors

Strategic Partnerships

Partnerships with industry leaders like Intel enhance Arqit's product offerings and market credibility, potentially driving long-term growth and innovation in quantum encryption solutions.

Market Positioning

Arqit's focus on quantum encryption positions it as a leader in cybersecurity, addressing emerging threats and expanding its market share in a growing industry.

Cost Control

Effective cost control measures, such as reducing headcount, improve operational efficiency and financial sustainability, crucial for long-term business viability.

Negative Factors

Revenue Decline

Significant revenue decline indicates challenges in market penetration and sales execution, potentially impacting long-term growth and financial stability.

Operating Loss Increase

Rising operating losses highlight inefficiencies and financial strain, which could hinder future investments and strategic initiatives essential for growth.

Delayed Revenue Recognition

Delays in revenue recognition disrupt cash flow and financial planning, affecting the company's ability to invest in growth and maintain operational stability.

Arqit Quantum Business Overview & Revenue Model

Company Description

Arqit Quantum (ARQQ) is a technology company specializing in quantum encryption and cybersecurity solutions. Founded to address the growing concerns around data security in the quantum computing era, Arqit provides a unique quantum key distribution service that enables secure communication by generating and distributing encryption keys using quantum principles. The company operates primarily in the cybersecurity sector, targeting industries such as finance, government, and telecommunications, where data protection is paramount.

How the Company Makes Money

Arqit Quantum generates revenue through its subscription-based model for its quantum encryption services, where clients pay for access to its quantum key distribution platform. The company also engages in partnerships with government agencies and large enterprises, providing tailored solutions and consulting services. Additionally, Arqit may generate revenue through licensing its technology to other firms and participating in joint ventures that leverage its quantum encryption capabilities. The strategic alliances with industry leaders and government contracts significantly contribute to its earnings, enabling scalability and expanding its market reach.

Arqit Quantum Financial Statement Overview

Summary

Arqit Quantum is facing significant financial difficulties with declining revenue, poor profitability, and weak cash flow. The income statement, balance sheet, and cash flow statement all indicate severe challenges, including negative growth rates, operational inefficiencies, and high net losses.

Income Statement

Arqit Quantum's income statement reveals significant challenges. The company experienced substantial declines in total revenue compared to previous years, with a negative growth rate. Both EBIT and net profit margins are negative, indicating operational inefficiencies and high net losses. Despite a positive gross profit margin in the latest year, the overall profitability remains deeply unprofitable.

Balance Sheet

The balance sheet indicates a moderate financial position with some concerns. The company has a debt-to-equity ratio that suggests manageable leverage, although equity is shrinking. The equity ratio has decreased, pointing to increased liabilities over assets. There is a potential cash position, but shrinking stockholder equity signals financial stress.

Cash Flow

Arqit Quantum's cash flow statement highlights severe issues. The company has negative operating and free cash flows, indicating it is not generating enough cash to sustain operations or cover capital expenditures. The free cash flow growth rate is negative, reflecting a worsening cash flow situation. The operating cash flow to net income ratio is also negative, further demonstrating cash generation problems.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	342.00K	293.00K	640.00K	7.21M	47.91K	0.00
Gross Profit	-408.00K	-1.59M	-1.65M	5.92M	-139.00K	-159.00K
EBITDA	-18.04M	-20.19M	-41.20M	54.92M	-270.60M	0.00
Net Income	-24.07M	-54.58M	-70.39M	65.08M	-271.73M	-568.00K
Balance Sheet
Total Assets	29.39M	26.72M	99.78M	123.87M	113.73M	9.31M
Cash, Cash Equivalents and Short-Term Investments	24.78M	18.70M	44.45M	48.97M	86.97M	195.00K
Total Debt	833.00K	990.00K	8.40M	7.83M	0.00	5.46M
Total Liabilities	13.41M	14.90M	33.13M	45.32M	147.57M	8.38M
Stockholders Equity	15.98M	11.82M	66.65M	78.56M	-33.84M	931.00K
Cash Flow
Free Cash Flow	-27.30M	-37.45M	-48.95M	-51.35M	-33.34M	-5.91M
Operating Cash Flow	-23.95M	-34.13M	-32.83M	-26.92M	-24.03M	-1.33M
Investing Cash Flow	-1.69M	-2.40M	-16.08M	-24.43M	-9.31M	-4.57M
Financing Cash Flow	29.31M	11.19M	44.85M	22.37M	120.11M	1.68M

Arqit Quantum Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 27.48
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ARQQ, the sentiment is Negative. The current price of 27.48 is below the 20-day moving average (MA) of 27.78, below the 50-day MA of 36.73, and below the 200-day MA of 29.06, indicating a neutral trend. The MACD of -1.37 indicates Negative momentum. The RSI at 44.23 is Neutral, neither overbought nor oversold. The STOCH value of 49.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ARQQ.

Arqit Quantum Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
QBTS	54 Neutral	$9.38B	―	-122.03%	―	156.20%	-218.56%
QUBT	52 Neutral	$2.88B	―	-14.49%	―	41.51%	-111.74%
IONQ	51 Neutral	$18.62B	―	-108.23%	―	113.07%	-555.52%
LAES	50 Neutral	$872.73M	―	-45.62%	―	-44.30%	16.42%
ARQQ	46 Neutral	$465.34M	―	-181.44%	―	80.89%	68.29%
RGTI	41 Neutral	$8.87B	―	-141.90%	―	-36.98%	-238.63%

Arqit Quantum Corporate Events

Arqit Quantum Settles Class Action Lawsuit for $7 Million

On October 20, 2025, Arqit Quantum Inc. announced a settlement agreement in a class action lawsuit filed against the company and certain directors in the United States District Court for the Eastern District of New York. The settlement, pending court approval, is valued at $7 million and aims to resolve the Federal Action, which will also lead to the dismissal of a related lawsuit in the Supreme Court of the State of New York. This settlement marks a significant step in resolving legal challenges facing Arqit Quantum, potentially stabilizing its operations and reassuring stakeholders.

Arqit Quantum Reports Preliminary Fiscal Year 2025 Results

On October 9, 2025, Arqit Quantum Inc. announced its preliminary unaudited financial results for the second half and full fiscal year ending September 30, 2025. The company reported expected revenues of approximately $460,000 to $470,000 for the second half and $525,000 to $535,000 for the full year, with cash reserves of $36.9 million. The growth in revenue was attributed to new contracts and the commencement of a multi-year enterprise license contract in the EMEA region. Arqit also disclosed ongoing settlement discussions related to a class action lawsuit in the United States.

Arqit Quantum Finalizes Advisory Compensation with Deutsche Bank

On September 15, 2025, Arqit Quantum Inc. announced an agreement with Deutsche Bank Securities Inc. and Deutsche Bank AG, London Branch, to compensate them with $1,000,000 and 48,561 ordinary shares for advisory services related to a business combination completed in September 2021. This transaction, which involves the issuance of shares under an effective shelf registration, highlights Arqit’s ongoing efforts to solidify its financial and strategic partnerships, potentially impacting its market positioning and stakeholder relations.

Arqit Quantum Inc. Announces AGM Results and Board Appointments

On September 11, 2025, Arqit Quantum Inc. held its annual general meeting where shareholders approved all proposals, including the appointment of three nominees to the Board of Directors. This event signifies a continued commitment to strengthening its governance structure, which may enhance its strategic positioning in the quantum technology industry.

Arqit Quantum Inc. Announces September 2025 Annual General Meeting

Arqit Quantum Inc. has announced its upcoming Annual General Meeting of Shareholders, scheduled for September 11, 2025, in London and via webcast. The meeting will address the election of two Class I directors and other business matters. Shareholders of record as of August 8, 2025, are entitled to vote, and the company encourages participation either in person or through proxy voting. This meeting is crucial for stakeholders as it involves key decisions impacting the company’s governance and strategic direction.