Investors are selling off D-Wave Quantum (NYSE:QBTS), lack of profits no doubt contribute to shareholders one-year loss

It is a pleasure to report that the D-Wave Quantum Inc. (NYSE:QBTS) is up 310% in the last quarter. But that doesn't change the fact that the returns over the last year have been stomach churning. To wit, the stock has dropped 86% over the last year. So it's not that amazing to see a bit of a bounce. Only time will tell if the company can sustain the turnaround. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

With the stock having lost 18% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

Check out our latest analysis for D-Wave Quantum

Given that D-Wave Quantum didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year D-Wave Quantum saw its revenue grow by 7.0%. That's not a very high growth rate considering it doesn't make profits. Even so you could argue that it's surprising that the share price has tanked 86%. Clearly the market was expecting better, and this may blow out projections of profitability. But if it will make money, albeit later than previously believed, this could be an opportunity.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling D-Wave Quantum stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

While D-Wave Quantum shareholders are down 86% for the year, the market itself is up 5.9%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Putting aside the last twelve months, it's good to see the share price has rebounded by 310%, in the last ninety days. Let's just hope this isn't the widely-feared 'dead cat bounce' (which would indicate further declines to come). It's always interesting to track share price performance over the longer term. But to understand D-Wave Quantum better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 6 warning signs with D-Wave Quantum (at least 3 which are concerning) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

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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.