QBTS stock is still undervalued, this analyst says

Roth Capital Markets analyst Suji Desilva maintained a “Buy” rating and US$18.00 target on D-Wave Quantum (D-Wave Quantum Stock Quote, Chart, News, Analysts, Financials NTSE:QBTS) in a July 1 update, highlighting the company’s strengthened balance sheet following the completion of its latest at-the-market (ATM) stock offering.

Desilva said D-Wave now holds the highest cash position among its quantum computing peers. He added that a recent fireside chat with management left him constructive on the company’s hardware sales outlook relative to earlier expectations.

D-Wave develops and supplies quantum computing technology, specializing in annealing and gate-model quantum computers. Based near Vancouver, Canada, with U.S. operations in Palo Alto, the company focuses on real-world applications in logistics, AI, materials science, and more. Founded in 1999, D-Wave serves major clients like Volkswagen, Lockheed Martin, and NEC and employs about 200 people, 70% of whom are in R&D.

Desilva said D-Wave completed its latest $400-million ATM funding program in just over 10 days, using only a small portion of its average 30-day trading volume of about 85 million shares.

“With the ATM executed at an average share price of $15.18, well above the prior ATM executed at $6.10, QBTS has now increased its current cash balance to $815m, representing, by our analysis, the largest on-balance sheet cash position among quantum computing comparables,” Desilva said. “While QBTS’ share count increased accordingly, we believe the remaining warrant exposure is relatively minimal at this point, with most having already been exercised.”

Desilva said that with an estimated Adjusted EBITDA loss of $57-million in calendar 2025, he believes D-Wave has enough funding to carry out its business plan.

“Management explicitly indicated that its planned use of proceeds includes strategic acquisitions as the quantum computing space continues to consolidate around technology leadership companies,” Desilva said. “Separately, we hosted QBTS management for a fireside chat at our ROTH London conference and came away incrementally constructive on the revenue magnitude and pace of the company’s Advantage quantum computing hardware sales, following the two meaningful customer engagements announced to date. Management indicated that they could install a new hardware customer in a three- to four-month period.”

Desilva thinks that D-Wave will generate $25.5-million in revenue with a non-GAAP loss per share of $0.11 in fiscal 2025. He expects those numbers to improve to $50.0-million in revenue and a narrower non-GAAP loss per share of $0.04 in fiscal 2026. Adjusted EBITDA estimates were not provided.

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