Assessing Quantum Computing (QUBT) Valuation After A Sharp Pullback From Multi Year Gains

Quantum Computing stock moves after recent trading performance

Quantum Computing (QUBT) has come into focus after a sharp pullback, with the stock showing a 5.4% decline over the past day and double-digit negative returns over the past week and month.

See our latest analysis for Quantum Computing.

At a share price of $9.13, Quantum Computing’s recent pullback, with a 30.6% 90 day share price return decline, sits against a much stronger 3 year total shareholder return of more than 3.5x. This suggests that recent momentum has been fading while longer term holders have still seen substantial gains.

If sharp moves in Quantum Computing have your attention, it could be a good moment to see what else is moving across high growth tech and AI names with high growth tech and AI stocks.

With QUBT now well off its recent highs but still carrying a multi year total return of more than 3.5x, you have to ask: is this pullback a genuine bargain, or is the market already pricing in future growth?

Most Popular Narrative: 61.4% Undervalued

Quantum Computing’s most followed narrative sets a fair value well above the last close of $9.13, framing the recent pullback against a much higher long term target.

Acceleration of AI and data center workloads is driving urgent demand for energy efficient, high speed computing. This is positioning QCi’s room temperature photonic quantum and reservoir computing platforms to scale from small research contracts to larger production deployments, which should expand revenue and support higher gross margins as volumes increase.

Read the complete narrative.

Curious what kind of revenue surge and margin shift need to line up for this story to work? The entire fair value hinges on that growth path and how it compounds.

The most popular narrative pegs Quantum Computing’s fair value at $23.67, using an 8.2% discount rate and long run assumptions on revenue growth, future margins and earnings power that differ from the current market price. With that fair value sitting well above $9.13, the gap reflects a view that today’s revenue base and losses do not fully capture the potential from photonic quantum systems, integrated chips and quantum secure networking if these platforms scale as outlined in the narrative.

Result: Fair Value of $23.67 (UNDERVALUED)

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

However, you also have to weigh the tiny US$546,000 revenue base and US$68.4 million loss against rising operating costs and the risk that pilots never scale.

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

Build Your Own Quantum Computing Narrative

If you are not fully on board with this view or want to lean on your own research instead, you can stress test the assumptions yourself and spin up a fresh Quantum Computing story in just a few minutes, starting with Do it your way.

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

Looking for more investment ideas?

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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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