Assessing Quantum Computing Inc. (QUBT) Valuation As Dilution Risk And Insider Selling Draw Focus

Recent scrutiny of Quantum Computing (QUBT) has centered on its very small reported revenues, heavy cash use, and reliance on fresh equity issuances, as well as insider share sales that have raised questions about management confidence and shareholder dilution.

See our latest analysis for Quantum Computing.

Those concerns have been playing out in the share price, with a 30 day share price return of a 36.61% decline and a 90 day share price return of a 30.36% decline. Even though the 3 year total shareholder return is still a little over 4x, this suggests that early momentum has faded as investors reassess the risks around dilution and limited revenues.

If recent volatility in Quantum Computing has you rethinking your exposure to this theme, it could be worth scanning a broader set of 24 quantum computing stocks as a starting point for further research.

With Quantum Computing now trading well below recent highs, yet still carrying a market cap far above its US$546,000 in revenue, investors have to ask: is this a high risk entry point, or is the market already pricing in ambitious future growth?

Most Popular Narrative: 66% Undervalued

Quantum Computing's most followed narrative pegs fair value at $23.67 per share versus the last close of $8.05, which sets up a very wide gap for investors to interpret.

The move from prototype systems to planned volume manufacturing by the end of the decade, supported by over $1.5 billion of newly raised capital and a low liability balance, allows QCi to invest aggressively in automation, yield improvement and design reuse. These efforts should help reduce unit costs and support sustained improvement in gross margin and earnings power.

Read the complete narrative.

Curious how a tiny revenue base ties to that higher fair value? The narrative leans heavily on rapid revenue expansion and a sharp swing in margins. Want to see which growth and profitability assumptions are doing the heavy lifting behind that $23.67 figure?

Result: Fair Value of $23.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this story can break if QCi struggles to turn tiny US$546,000 revenues into repeatable sales, or if rising expenses keep net losses near US$68.355 million.

Find out about the key risks to this Quantum Computing narrative.

Next Steps

If this mix of risks and potential rewards feels hard to reconcile, take a closer look now and carefully assess the balance of 1 key reward and 4 important warning signs.

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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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