D-Wave Quantum (NYSE:QBTS) Stock Price Down 6.9% - Here's Why

Key Points

• D-Wave Quantum shares fell 6.9% after the company reported earnings, with heavy trading volume and the stock touching an intraday low of $20.88 before last trading near $22.38.
• The company beat EPS expectations with a smaller-than-expected loss of $0.05 per share, but revenue missed estimates at $2.86 million and was down 80.9% year over year, highlighting weak near-term growth.
• Investors also focused on a surge in bookings of nearly 2,000%, which points to improving commercial demand, even as analysts remain cautious because profitability is still far away.

D-Wave Quantum Inc. (NYSE:QBTS - Get Free Report)'s stock price traded down 6.9% on Tuesday . The company traded as low as $20.88 and last traded at $22.3830. 46,681,499 shares changed hands during mid-day trading, an increase of 57% from the average session volume of 29,756,914 shares. The stock had previously closed at $24.03.

Key Stories Impacting D-Wave Quantum

Here are the key news stories impacting D-Wave Quantum this week:

• Positive Sentiment: D-Wave beat earnings expectations, reporting a smaller-than-expected loss of $0.05 per share versus estimates for a $0.08 loss, which suggests some improvement in cost control. Earnings report and conference call
• Positive Sentiment: Bookings surged nearly 2,000%, highlighting stronger commercial demand and giving investors hope that future revenue could improve even though this quarter was weak. TipRanks earnings coverage
• Neutral Sentiment: Management continues to emphasize technical progress and commercialization of its quantum systems, which may support the long-term story but does not offset the near-term revenue weakness. Motley Fool earnings reaction
• Negative Sentiment: Revenue came in at $2.86 million, below the $4.19 million consensus estimate, and was down 80.9% year over year, underscoring that growth remains uneven. Zacks earnings report
• Negative Sentiment: Analysts remain cautious because profitability is still far off and the company continues to post large losses and negative margins, which can pressure the stock even after a beat on EPS. Seeking Alpha earnings preview

Wall Street Analyst Weigh In

A number of analysts have recently weighed in on the stock. Zacks Research raised shares of D-Wave Quantum from a "strong sell" rating to a "hold" rating in a research report on Tuesday, April 28th. Rosenblatt Securities reaffirmed a "buy" rating and issued a $43.00 target price on shares of D-Wave Quantum in a research report on Wednesday, January 28th. Benchmark reaffirmed a "buy" rating and issued a $35.00 target price on shares of D-Wave Quantum in a research report on Friday, January 23rd. Wall Street Zen downgraded shares of D-Wave Quantum from a "hold" rating to a "sell" rating in a research report on Saturday, February 7th. Finally, Northland Securities assumed coverage on shares of D-Wave Quantum in a research report on Monday, April 20th. They issued a "market perform" rating and a $22.00 target price on the stock. Fourteen equities research analysts have rated the stock with a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the stock. Based on data from MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and an average target price of $35.53.

D-Wave Quantum Stock Down 6.9%

The company's 50-day moving average is $17.83 and its 200 day moving average is $22.84. The company has a market capitalization of $8.28 billion, a PE ratio of -20.35 and a beta of 1.95. The company has a debt-to-equity ratio of 0.04, a quick ratio of 42.25 and a current ratio of 42.38.

D-Wave Quantum (NYSE:QBTS - Get Free Report) last announced its quarterly earnings data on Tuesday, May 12th. The company reported ($0.05) EPS for the quarter, beating the consensus estimate of ($0.08) by $0.03. D-Wave Quantum had a negative net margin of 1,444.10% and a negative return on equity of 58.58%. The company had revenue of $2.86 million for the quarter, compared to the consensus estimate of $4.19 million. During the same period in the prior year, the firm posted ($0.02) EPS. D-Wave Quantum's revenue for the quarter was down 80.9% on a year-over-year basis. As a group, analysts anticipate that D-Wave Quantum Inc. will post -0.44 EPS for the current year.

Insider Activity

In related news, CFO John M. Markovich sold 10,706 shares of the stock in a transaction dated Friday, March 13th. The shares were sold at an average price of $17.63, for a total transaction of $188,746.78. Following the sale, the chief financial officer directly owned 1,451,427 shares of the company's stock, valued at approximately $25,588,658.01. This represents a 0.73% decrease in their position. The sale was disclosed in a document filed with the SEC, which can be accessed through this hyperlink. Also, VP Sophie C. Ames sold 3,070 shares of the stock in a transaction dated Monday, April 20th. The shares were sold at an average price of $21.35, for a total transaction of $65,544.50. Following the sale, the vice president directly owned 643,678 shares in the company, valued at $13,742,525.30. This trade represents a 0.47% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Over the last 90 days, insiders sold 31,776 shares of company stock valued at $574,571. Company insiders own 3.20% of the company's stock.

Institutional Trading of D-Wave Quantum

A number of institutional investors have recently made changes to their positions in QBTS. Csenge Advisory Group lifted its stake in shares of D-Wave Quantum by 99.1% in the 3rd quarter. Csenge Advisory Group now owns 35,886 shares of the company's stock worth $887,000 after purchasing an additional 17,860 shares during the period. Mutual Advisors LLC bought a new position in shares of D-Wave Quantum in the 3rd quarter worth approximately $1,069,000. Federated Hermes Inc. lifted its stake in shares of D-Wave Quantum by 259,560.6% in the 3rd quarter. Federated Hermes Inc. now owns 184,359 shares of the company's stock worth $4,556,000 after purchasing an additional 184,288 shares during the period. Caitong International Asset Management Co. Ltd lifted its stake in shares of D-Wave Quantum by 370.9% in the 3rd quarter. Caitong International Asset Management Co. Ltd now owns 96,248 shares of the company's stock worth $2,378,000 after purchasing an additional 75,807 shares during the period. Finally, SG Americas Securities LLC lifted its stake in shares of D-Wave Quantum by 254.7% in the 4th quarter. SG Americas Securities LLC now owns 2,272,020 shares of the company's stock worth $59,413,000 after purchasing an additional 1,631,415 shares during the period. Hedge funds and other institutional investors own 42.47% of the company's stock.

D-Wave Quantum Company Profile

D-Wave Quantum Inc NYSE: QBTS develops and provides quantum computing systems, software and services focused on quantum annealing technology. Headquartered in Burnaby, British Columbia, D-Wave designs specialized processors that leverage quantum mechanics to solve complex optimization and sampling problems. Since its founding in 1999 by physicists including Geordie Rose, the company has pursued the development of commercially viable quantum hardware and accompanying software tools.

The company's product portfolio centers on its quantum annealers, which are complemented by hybrid solvers that integrate classical and quantum computing resources.

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