Considering D-Wave Quantum's high Price to Sales ratio of
306.52X and a significant net income loss of
143.9M, potential investors might want to exercise caution before buying, as these indicators suggest the stock could be overvalued relative to its current revenue generation.
Key Takeaways
D-Wave Quantum's stock, currently priced at $6.64, appears overvalued given its modest future outlook. With a three-month investment horizon, it carries significant risk. The company's Sharpe Ratio stands at 0.11, indicating a 0.11% return per unit of volatility over the past three months. We've analyzed 29 technical indicators to assess whether the anticipated 1.49% returns justify the associated risks. Consider D-Wave's Market Risk Adjusted Performance of 3.18, a downside deviation of 12.21, and a mean deviation of 10.65 to understand the specific risks that can't be diversified away.
Does D Wave (USA Stocks:QBTS) have stable basic indicators based on the newest gain?
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include D Wave income statement, its balance sheet, and the statement of cash flows. Potential D Wave investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although D Wave investors may use each financial statement separately, they are all related. The changes in D Wave's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on D Wave's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of D Wave
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of D Wave performance into the future periods or doing a reasonable stock valuation. The intrinsic value of D Wave shares is the value that is considered the true value of the share. If
the intrinsic value of QBTS is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares D Wave. Please read more on our
fundamental analysis page.
How effective is D Wave in utilizing its assets?
D Wave Quantum reports assets on its Balance Sheet. It represents the amount of QBTS resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, D Wave aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Electronic Equipment, Instruments & Components space. To get a better handle on how balance sheet or income statements item affect QBTS volatility, please check the breakdown of all its
fundamentals.
Are D Wave Earnings Expected to grow?
The
future earnings power of D Wave involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of D Wave factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. D Wave
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of QBTS
expected earnings.
D Wave Gross Profit
D Wave Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing D Wave previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show D Wave Gross Profit growth over the last 10 years. Please check D Wave's
gross profit and other
fundamental indicators for more details.
Detailed Perspective On D Wave
The newest price gain of D Wave Quantum created some momentum for private investors as it was traded today as low as
7.64 and as high as
10.2 per share. The company directors and management may have good odds in positioning the entity resources to exploit market volatility in
April. The stock standard deviation of daily returns for 90 days investing horizon is currently 13.67. The very high volatility is mostly attributed to the latest market swings and not very good earnings reports from some of the D Wave partners.
Please be aware that individual investors typically purchase shares for their personal accounts and usually in smaller quantities compared to institutional investors. While they might influence D Wave's decisions if they own a significant combined portion of its shares, such influence is relatively rare. Conversely, institutional investors - like mutual funds, pension funds, hedge funds, and other investment companies - often have a substantial sway over D Wave's decisions due to their larger holdings.
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. D Wave has an asset utilization ratio of 14.87 percent. This implies that the Company is making $0.15 for each dollar of assets. An increasing asset utilization means that D Wave Quantum is more efficient with each dollar of assets it utilizes for everyday operations.
| Non Current Assets Total12.4 M | | | | Total Current Assets33.4 M | |
| Net Tangible Assets | (7.14 Million) | -16.41 |
| Non Current Assets Total | 12.36 Million | 28.41 |
| Non Currrent Assets Other | 202,950 | 0.47 |
| Other Assets | 1.63 Million | 3.75 |
| Other Current Assets | 2.84 Million | 6.52 |
| Total Current Assets | 33.39 Million | 76.73 |
| Intangible Assets | 231,825 | 0.53 |
They say "numbers don't lie," and when it comes to D-Wave Quantum, the figures paint a complex picture. With a market capitalization of $2.71 billion and a revenue of just $8.83 million, the company faces a challenging valuation landscape, as evidenced by its high price-to-sales ratio of 306.52X. Despite these hurdles, D-Wave Quantum's substantial change in cash of $136.7 million suggests a strong liquidity position, which could be pivotal for future growth initiatives. However, the company must address its operating losses, which stand at 77.2 million, to truly capitalize on its potential in the burgeoning quantum computing sector.
Over 3 percent gain for D Wave. What does it mean for private investors?
D-Wave Quantum's recent rise of over 3% has caught the attention of private investors. With a skewness of 0.48, the stock shows a moderate lean towards positive returns, suggesting a greater potential for gains than losses. This could be an enticing opportunity for investors looking to ride the current momentum, though it's crucial to remain aware of the risks tied to market fluctuations. A balanced strategy and thorough research are essential when considering such investments.
D-Wave Quantum's stock is experiencing significant volatility, which can be a double-edged sword.
While it offers opportunities to time the market, it also poses risks, especially during bear markets. Investors often need to adjust their portfolios, seeking stability as prices fluctuate.Given the recent surge in D-Wave Quantum's stock price, it’s crucial to take a step back and evaluate whether this enthusiasm is grounded in solid fundamentals or if it's being driven by speculative excitement. While the stock has caught the attention of analysts with a strong buy consensus, it's important to note that the highest estimated target price sits at $6.15, which suggests that the current price might have outpaced realistic expectations. With only three strong buy recommendations, investors should be cautious and consider whether the valuation hype value of 9.12 truly reflects the company's intrinsic worth. In such a dynamic market, ensuring that investment decisions are based on sound analysis rather than market euphoria can help in navigating potential volatility..
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Vlad Skutelnik is a Macroaxis Contributor. Vlad covers stocks, funds, cryptocurrencies, and ETFs that are traded in North America, focusing primarily on fundamentals, valuation and market volatility. He has many years of experience in fintech, predictive investment analytics, and risk management.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of D Wave Quantum. Please refer to our
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