D-Wave Quantum price target raised to $10.00 at Roth

Following the company’s fourth quarter results, Roth analyst Suji Desilva has raised his price target on D-Wave Quantum (D-Wave Quantum Stock Quote, Chart, News, Analysts, Financials NYSE:QBTS).

On March 13, QBTS reported its Q4 and fiscal 2024 results. The company posted an Adjusted EBITDA loss of $15.3-million on revenue of $2.3-million, down 21% year-over-year.

“Every day D-Wave’s quantum technology is helping customers gain competitive advantages, discover new scientific breakthroughs, and fuel innovations that were previously unimaginable,” CEO Dr. Alan Baratz said. “Our mission is unwavering – to help organizations realize the benefits of quantum computing now. With record bookings, a record cash position and an unequivocal demonstration of our quantum system outperforming classical on a real-world problem, our progress toward achieving that mission is clear.”

The analyst says the company’s optimism in not misplaced.

“We believe QBTS is driving revenue, and booking opportunities have persisted as the company leverages its growing sales effort to penetrate key vertical opportunities,” he wrote. “We are encouraged by the growing backlog and opportunity to diversify into hardware sales beyond core QCaaS quantum cloud services.”

In a research update to clients March 13, Desilva maintained his “Buy” rating on QBTS and raised his price target on the stock from $7.00 to $10.00.

The analyst thinks the company will post a non-GAAP EPS loss of $0.24 on revenue of $20.7-million in fiscal 2025. He expects a non-GAAP loss of $0.21 on revenue of $32.0-million in fiscal 2026.

“We are encouraged that QBTS continues to support a strong quantum computing customer base for its QCaaS service, with 135 total customers including 76 commercial customers (56% of total),” Desilva added. “Among its commercial customer base, QBTS counts one-third coming from the Global 2000. In the quarter, QBTS shipped its first Advantage2 quantum computer to its inaugural hardware customer, with bookings growing 7x in the quarter ahead of qualification/revenue recognition expected in 1Q25. As a result, QBTS was able to guide 1Q25 revenue growing to ~$10m, driven primarily by revenue from its first system sale. We are encouraged by the company’s increasing visibility across QCaaS customers and future potential hardware sales in the pipeline. We also believe QBTS’s recent announcement of achieving quantum supremacy on a real-world problem using a quantum annealing computer speaks to the company’s competitive advantage in the marketplace.”