D-Wave Quantum (QBTS): Assessing Valuation After Breakthrough Police Project Boosts Real-World Adoption

D-Wave Quantum (NYSE:QBTS) is capturing attention after its technology helped North Wales Police halve emergency response times by enabling smarter vehicle deployment. This project provided a real-world test of the practical advantages of quantum computing.

See our latest analysis for D-Wave Quantum.

D-Wave Quantum has ridden a wave of positive news, with high-profile contracts and real-world quantum computing breakthroughs driving momentum. Excitement around the North Wales Police project and new orders for its Novera systems have helped propel a 35.5% total shareholder return over the past year, reflecting building optimism for its long-term growth potential.

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With the stock hitting new highs and optimism running strong, the question is whether D-Wave Quantum is still undervalued or if the market has already priced in much of its expected future growth. Could this be a true buying opportunity?

Price-to-Book of 17.3x: Is it Justified?

D-Wave Quantum is trading at a price-to-book ratio of 17.3x, which puts it well above the typical range for its peer group. The current share price of $35.02 stands out, considering this premium multiple.

The price-to-book ratio compares the market value of a company’s shares to its book value (assets minus liabilities). For software companies like D-Wave Quantum, it offers a snapshot of how highly the market values future innovation and growth potential relative to tangible accounting assets.

Looking at the numbers, D-Wave Quantum is seen as good value versus direct peers, whose average price-to-book sits higher at 19.9x. However, compared to the broader US Software industry, which trades at just 4.1x, D-Wave remains very expensive. This signals that investors are willing to pay a substantial premium, likely betting on quantum breakthroughs to fuel long-term growth.

Given the large gap between D-Wave’s multiple and both its peer average and the industry, the market could re-rate the stock closer to sector norms as the company matures.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book of 17.3x (ABOUT RIGHT)

However, heavy losses and a share price above most analyst targets could spark a shift in sentiment if growth momentum does not continue.

Find out about the key risks to this D-Wave Quantum narrative.

Build Your Own D-Wave Quantum Narrative

If you want to dig into the numbers and see how your conclusions compare, you can craft your own view in just a few minutes. Do it your way.

A great starting point for your D-Wave Quantum research is our analysis highlighting 1 key reward and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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