D-Wave Quantum (QBTS) saw its stock drop by 8.5% on November 6, even after announcing solid third-quarter sales and bookings. This downturn might be linked to losses that were higher than investors had anticipated. Still, leading analysts are largely positive about the company’s long-term outlook.
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QBTS announced a remarkable 100% increase in year-over-year revenue, hitting $3.7 million, which surpassed expectations of $3.03 million. However, it recorded a diluted loss of $0.41, which was less favorable than consensus predictions and was affected by elevated non-cash, non-operating warrant remeasurement costs during the quarter.
5-Star Analysts Remain Bullish on QBTS
In light of the results, Needham analyst Quinn Bolton maintained his Buy rating and set a price target of $48 for QBTS, indicating a 69.1% upside potential. He recently raised his target significantly from $20, anticipating robust business performance. Bolton ranks #45 out of 10,109 analysts tracked by TipRanks, with a 59% success rate and an impressive average return per rating of 37%.
Meanwhile, Roth MKM analyst Sujiva de Silva also kept a Buy rating but reduced her price target from $50 to $40, suggesting nearly 41% upside potential. De Silva is ranked 101st, boasting a success rate of 52% and an average return per rating of 35.10%.
Bolton – Customer Engagement Remains Strong
Bolton pointed out that D-Wave continues gaining traction in both new and repeat customer transactions across various industries and regions. Noteworthy partnerships include a significant international airline from the U.S. and Turkey’s Yapi Credit Bank. He highlighted progress in the development of D-Wave’s gate-model quantum systems and the next-generation Advantage3 annealing platform.
A major five-year, €10 million contract with Switzerland’s Quantum Technology for installing the Advantage2 system in Italy was a key point, with potential follow-up purchases estimated between $20 million and $40 million. Bolton noted D-Wave’s expectation to sell at least one system annually for the next several years. The company has completed its fluxonium qubit circuit and superconducting control chip for the gate model system, along with the Advantage3 prototype chip, which is set to begin testing this quarter.
De Silva – Opportunities in the Pipeline Are Growing
Mr. de Silva expressed optimism regarding the expanding opportunities within D-Wave’s global pipeline, especially concerning cloud services and hardware sales, as well as U.S. government projects gaining more traction. He mentioned D-Wave’s recent agreement with Swiss Quantum Technology and the uptake of the next-generation Advantage2 platform, which features 4,400 qubits, as promising indicators of future demand.
De Silva’s adjusted target reflects a more cautious yet still positive perspective, acknowledging that the current market conditions and growth trends support a lower, but still favorable, stock valuation.
Is QBTS Stock a Strong Buy?
Indeed, the consensus rating for QBTS stock is a Strong Buy at TipRanks, based on nine unanimous Buy ratings. The average price target for D-Wave Quantum stands at $29.38, suggesting a potential upside of 3.5% from current levels. Since the start of the year, QBTS stock has surged by nearly 238%.
