D-Wave Quantum (QBTS) AI Stock Analysis

• Market Cap: $1.67B
• Dividend Yield: N/A
• Average Volume (3M): 60.67M
• Price to Earnings (P/E): ―
• Beta (1Y): 4.08
• Revenue Growth: 14.27%
• EPS Growth: 35.36%
• Country: US
• Employees: 200
• Sector: Technology
• Sector Strength: 54
• Industry: Hardware & Equipment
• EPS (TTM): -0.42
• Shares Outstanding: 266,568,050
• 10 Day Avg. Volume: 53,371,215
• 30 Day Avg. Volume: 60,666,852
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 138.35
• Price to Cash Flow (P/CF): -18.10
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $9.63
• Price Target Upside: 39.36% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

D-Wave Quantum's overall score is influenced significantly by its poor financial performance, which highlights substantial net losses and negative equity. While the company shows promise through technological advancements and strategic partnerships, as reflected in its earnings call and corporate events, these are overshadowed by financial instability and weak valuation metrics. The stock's mixed technical indicators provide limited support.

Positive Factors

Financial Stability

D-Wave’s recapitalized balance sheet with $307M in cash has eliminated near-term liquidity concerns, providing sufficient capital to bridge to profitability.

Technology Development

The peer-reviewed publication of the company’s quantum supremacy demonstration is a significant achievement and was the highlight since the company’s last earnings release.

Negative Factors

Financial Performance

D-Wave reported revenue and adjusted EBITDA that came in below our estimates.

D-Wave Quantum Business Overview & Revenue Model

Company Description

DPCM Capital Inc is a blank check company.

How the Company Makes Money

D-Wave Quantum makes money primarily through the sale and leasing of its quantum computing systems, as well as through subscription-based access to its cloud-based quantum computing platform, known as Leap. The company also generates revenue by providing professional services, such as consulting and custom application development, to help clients integrate quantum solutions into their operations. Additionally, D-Wave forms strategic partnerships with academic institutions, research organizations, and industry leaders to expand its market reach and enhance its technological offerings. These partnerships often involve collaborative research projects and co-development agreements, which can contribute to the company's earnings.

D-Wave Quantum Financial Statement Overview

Summary

D-Wave Quantum is experiencing significant financial challenges, characterized by weak profitability and a strained balance sheet. While the company shows some revenue growth, these gains are offset by substantial net losses and high leverage. The negative stockholders' equity and cash flow deficits highlight the need for strategic financial restructuring and improvement in operational efficiencies to ensure long-term viability.

Income Statement

D-Wave Quantum has shown some revenue growth, with a 7.61% increase from 2023 to TTM 2024. However, the company is struggling with negative profitability, evident from consistent negative net profit margins and EBIT margins. The gross profit margin for TTM stands at 64.27%, indicating efficient management of production costs, but the high operating losses overshadow this strength.

Balance Sheet

The company’s balance sheet is concerning, with negative stockholders' equity of -$16.92 million in TTM 2024, signaling financial instability. The debt-to-equity ratio cannot be calculated due to negative equity, but the high total debt suggests potential solvency issues. The equity ratio is also negative, reflecting a weak financial position and heavy reliance on debt financing.

Cash Flow

D-Wave Quantum's cash flow situation is challenging, as evidenced by negative free cash flow and operating cash flow. The free cash flow growth is stagnant, with minimal improvement, and the operating cash flow to net income ratio remains negative, indicating a lack of cash generation relative to net losses.

Breakdown
TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
9.42M	8.76M	7.17M	6.28M	5.16M
	Gross Profit
6.06M	4.62M	4.25M	4.53M	4.25M
	EBIT
-73.53M	-80.55M	-59.46M	-31.78M	-19.44M
	EBITDA
-69.08M	-80.83M	-49.03M	-34.36M	-14.06M
	Net Income Common Stockholders
-73.82M	-82.72M	-38.97M	-34.07M	-18.25M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.30M	41.31M	7.07M	9.48M	21.34M
	Total Assets
48.60M	59.36M	26.95M	32.61M	47.46M
	Total Debt
71.84M	72.65M	18.99M	21.17M	4.66M
	Net Debt
44.53M	31.34M	11.93M	11.69M	-16.68M
	Total Liabilities
85.56M	83.84M	33.12M	29.59M	14.73M
	Stockholders Equity
-36.96M	-24.48M	-6.17M	3.02M	32.73M
Cash Flow		Free Cash Flow
-61.28M	-61.28M	-45.72M	-36.80M	-30.08M
	Operating Cash Flow
-59.40M	-60.65M	-45.23M	-34.80M	-29.29M
	Investing Cash Flow
-2.63M	-630.00K	-498.00K	-2.00M	-789.00K
	Financing Cash Flow
38.12M	95.64M	43.27M	24.91M	43.14M

D-Wave Quantum Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.91
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QBTS, the sentiment is Positive. The current price of 6.91 is above the 20-day moving average (MA) of 6.11, above the 50-day MA of 6.26, and above the 200-day MA of 2.94, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 72.67 is Negative, neither overbought nor oversold. The STOCH value of 87.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QBTS.

D-Wave Quantum Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVDA	75 Outperform	$2.82T	39.39	119.18%	0.03%	114.20%	146.26%
IBM	67 Neutral	$231.47B	38.84	24.14%	2.67%	1.45%	-20.56%
Sector *	58 Neutral	$21.67B	10.04	-18.58%	2.39%	5.01%	-23.17%
RGTI	48 Neutral	$2.56B	―	-170.20%	―	-10.15%	-67.68%
QSI	44 Neutral	$219.77M	―	-41.48%	―	182.62%	-3.67%
IONQ	43 Neutral	$4.17B	―	-76.34%	―	95.41%	-97.85%
QBTS	39 Underperform	$1.67B	―	436.39%	―	14.27%	35.36%

D-Wave Quantum Corporate Events

D-Wave Quantum Completes $150M Equity Offering Successfully

On January 23, 2025, D-Wave Quantum Inc. announced the successful completion of its $150 million ‘at-the-market’ equity offering program, with sales completed at an average price per share of $6.10, which was a 3.7% premium over the Volume Weighted Average Price of the stock. The company now holds a cash balance of approximately $320 million, which will be used for working capital and capital expenditures to support ongoing technical development and business operations. This financial move is seen as providing the necessary capital to execute its operating plan towards sustained profitability and positive cash flow, thereby solidifying its position in the quantum computing industry.

D-Wave Quantum Launches Leap Quantum LaunchPad Program

On January 22, 2025, D-Wave Quantum Inc. announced the launch of the Leap Quantum LaunchPad program, intended to accelerate the deployment of quantum computing applications. This initiative provides free trial access to D-Wave’s quantum technology and expertise, aiming to help customers utilize annealing quantum computing for complex business and scientific problems. The program is designed to facilitate the exploration and implementation of quantum applications, offering participants access to D-Wave’s annealing quantum computers and technical support for a three-month trial. The company also expanded access to its Quantum Programming Core and Quick Start Training programs, enhancing participants’ hands-on experience with quantum technology. This launch signifies D-Wave’s commitment to advancing quantum computing adoption and development, potentially impacting stakeholders by enabling the rapid deployment of transformative applications.

D-Wave Quantum Highlights Achievements at Needham Conference

On January 15, 2025, D-Wave Quantum Inc. released an investor presentation from the 27th Annual Needham Growth Conference, highlighting financial achievements and product updates for the 2024 fiscal year. The company showcased its advancements in quantum annealing and supremacy, emphasizing its strong system reliability and diverse customer base. D-Wave’s solutions have significantly optimized business operations across various sectors, demonstrating reduced scheduling times and improved network performance, underscoring its role in the commercialization of quantum technology.

D-Wave Quantum Partners with Carahsoft for U.S. Expansion

On January 15, 2025, D-Wave Quantum Inc. announced a partnership with Carahsoft Technology Corp. to expand the distribution of quantum computing solutions to the Public Sector in the United States. This collaboration aims to accelerate government adoption of quantum technology by leveraging Carahsoft’s reseller network and contract vehicles, thereby increasing visibility and accessibility of D-Wave’s solutions to address complex optimization challenges and national priorities like defense and infrastructure optimization.

D-Wave Quantum Asserts Leadership in Quantum Computing

D-Wave Quantum Inc.’s CEO, Dr. Alan Baratz, addressed comments made by NVIDIA’s CEO on CNBC, asserting the immediate commercial availability and real-world problem-solving capabilities of D-Wave’s annealing quantum computing solutions. Baratz emphasized that D-Wave’s technology is already being utilized by over 100 organizations to tackle complex optimization problems, positioning the company as a leader in the quantum computing industry by demonstrating significant computational advancements over traditional supercomputers.

D-Wave Quantum Completes Second SOC 2 Type 2 Audit

D-Wave Quantum Inc. announced the successful completion of its second SOC 2 Type 2 audit, underscoring its commitment to customer data security and protection. This achievement supports the company’s efforts to facilitate customers’ production deployments of quantum applications, evidenced by the introduction of service-level agreements for its Leap quantum cloud service. The audit, conducted by compliance assessor A-LIGN, affirms D-Wave’s leadership in using best practices for data protection, thereby enhancing its reputation as a trusted vendor in the quantum computing industry.

D-Wave Quantum CEO Highlights Quantum Computing Advances

D-Wave Quantum Inc. announced that its CEO, Dr. Alan Baratz, discussed the company’s progress and the advantages of quantum computing on Yahoo! Finance’s ‘Catalysts’ show. He emphasized D-Wave’s unique annealing quantum computing approach, which is effectively solving optimization problems across industries and driving commercial adoption. The technology is expected to have a significant impact on modern enterprises, offering solutions to complex problems in various sectors.

D-Wave Quantum Secures $175M to Boost Growth

D-Wave Quantum Inc. announced the successful completion of $175 million in gross proceeds from its ‘at-the-market’ equity offering programs. This funding strengthens the company’s financial position, allowing it to enhance its technical development efforts and execute its product and go-to-market strategies, thus positioning D-Wave for future growth and impact in the commercial adoption of quantum computing.

D-Wave Quantum Showcases Annealing Quantum Computing Leadership

D-Wave Quantum Inc.’s CEO, Dr. Alan Baratz, highlighted the transformative role of annealing quantum computing on Fox Business, emphasizing its unique capabilities in solving optimization problems that are crucial for modern businesses. This technology, already in use by major companies like Mastercard and Siemens, positions D-Wave as a leader in commercially viable quantum computing, offering practical solutions across diverse industries.

D-Wave Quantum Appoints Sharon Holt to Board

D-Wave Quantum Inc. has appointed Sharon Holt as a Class I director to its Board of Directors, effective November 22, 2024. Holt, an experienced leader in the tech industry with a background in sales, licensing, and marketing, will also join the Board’s Audit Committee. Her extensive experience, including roles at Infinera and Immersion Corporation, positions her well to contribute to D-Wave Quantum’s strategic direction.

D-Wave Quantum Unveils Advanced 4,400+ Qubit Processor

D-Wave Quantum Inc. has unveiled its cutting-edge 4,400+ qubit Advantage2 processor, marking a pivotal advancement in quantum computing. This new processor offers remarkable performance enhancements over its predecessor, with doubled coherence time, a 40% boost in energy scale, and increased qubit connectivity, enabling it to tackle complex computational challenges in fields like AI and materials science. These improvements promise faster, more precise solutions, underscoring D-Wave’s commitment to revolutionizing the quantum computing landscape.