Latest news with #PythiaResearch
Business Insider
25-07-2025
- Business
- Business Insider
D-Wave Quantum (QBTS): Overvalued Stock or Real Revenue Turnaround? Two Investors Weigh In
D-Wave Quantum Inc. (QBTS) has emerged as one of the standout players in the quantum industry, garnering increased attention after its stock surged over 140% year-to-date, reaching above $20. Investors are now weighing whether the move reflects a turning point in commercial quantum computing or a temporary spike driven by a single large sale. Only yesterday, B. Riley and Canaccord Genuity issued a Buy rating, with a price target of $20 to $22, which drove an impressive 15% rise in one trading session. Elevate Your Investing Strategy: Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence. However, two investors see a different picture altogether. The Neutral Case: Pythia Research Pythia Research sees D-Wave as uniquely positioned in the quantum space. Unlike most peers still in development, the company already has customers using its hardware and cloud-based platform in production. In Q1 2025, revenue reached $15 million, up from $2.5 million in the prior year. Gross margin improved to 93.6%, and the company ended the quarter with $304 million in cash. Pythia Research points to real-world deployments, such as Ford Otosan (F), reducing vehicle scheduling times from 30 minutes to under 5 using D-Wave Quantum Inc.'s technology. The company's hybrid solvers now support up to 2 million variables, with potential applications in logistics, manufacturing, and pharmaceuticals. With the commercial quantum market expected to grow from $2.1 billion in 2024 to over $20.5 billion by 2034, Pythia Research believes D-Wave Quantum is well-positioned to benefit. However, Pythia Research maintains a Hold rating and sees one glaring warning sign. It notes that while D-Wave Quantum expanded to 133 customers in Q1, 25% of which are Forbes Global 2000 companies, its revenue remains heavily concentrated, with 85% tied to a single $12.6 million system sale that highlights both enterprise traction and deal-dependent risk. The Bear Case: Bears of Wall Street Bears of Wall Street presents a more bearish view. As with Pythia Research, it sees a glowing hazard sign from the concentrated revenue stream, the majority of which comes from a single hardware sale to the Julich Supercomputing Centre. QCaaS revenue remained flat at $1.53 million, and deferred revenue dropped from $19.4 million to $6.3 million. Bears of Wall Street also notes that D-Wave Quantum continues to fund operations through equity. The share count has increased more than 80% year-over-year. R&D expenses are over 400% of revenue, and adjusted EBITDA remains negative. The company trades at over 240x forward sales, a level they view as difficult to support without more substantial recurring revenue. Their valuation model estimates the stock to be worth $5.21 per share. average stock price target for QBTS is $18, implying an 11.33% downside. Takeaway D-Wave Quantum Inc. is generating real interest from institutional investors and enterprise customers. At the same time, its financials show a company still reliant on large one-time deals. Upcoming earnings and traction in QCaaS growth will be important for both bullish and bearish investors to watch closely.
Business Insider
25-06-2025
- Business
- Business Insider
‘It's Just the Beginning,' Says Investor About Joby Stock
Joby Aviation (NYSE:JOBY) stock stands to gain from being part of an industry poised for serious growth over the coming years. According to Bank of America, eVTOL deliveries will grow at a CAGR (compound annual rate) of 62% through 2030, with the number of aircraft in service expected to surpass 250,000 by 2045. Confident Investing Starts Here: Joby, which is developing a quiet, all-electric air taxi capable of carrying four passengers at 200 mph, appears well-positioned to make the most of this opportunity. However, there's one key issue to remember here: Joby is still at the pre-revenue stage, and it commands a market cap of nearly $7 billion. And that, says investor Pythia Research (PR), 'embodies sheer investor hope.' 'With a ~$7 billion valuation and no commercial revenues, Joby effectively trades at infinite forward earnings and sales multiples,' PR goes on to say. 'Such a valuation is 100% based on execution as it trades at very high forward Price/Sales multiple, reflecting a nearly pure speculative premium.' That's not to say the company can't grow into such a valuation. If Joby ramps up to delivering hundreds of aircraft per year by 2027, as suggested by its production plans and commercial trajectory, PR thinks its current valuation 'could be justified or even conservative.' On the other hand, if things don't go according to plan, namely if there are delays in certification or weak market uptake, that could lead to significant downside for investors. While Toyota's $500 million investment and hands-on support in manufacturing help ease liquidity concerns and boost credibility, until Joby shows stronger orders or positive cash flow, PR believes regulatory and capital risks remain key concerns. Nevertheless, looking at the company's objectives, PR thinks they are not merely pipe dreams. Management aims to launch service in Dubai by 2026, secure FAA certification by the end of 2025, and start U.S. commercial flights soon after. While ambitious, these timelines are realistic considering the FAA's 'reported engagement' and Joby's progress, having submitted 62% of the remaining FAA Stage 4 documents out of over 13,000 total. As the current regulatory and manufacturing front-runner with early military monetization via contracts with the U.S. Department of Defense (DoD), and global JV partnerships, especially through its partnership with Virgin Atlantic in the UK, Joby is 'uniquely positioned' to capture a dominant share of the market. 'If the company converts its certification lead and capital-light global model into scaled commercial deployment, its EV could represent just the beginning of a multi-decade compounding story,' PR summed up. All things considered, Pythia Research views Joby as a standout in the emerging eVTOL space and believes the stock presents a compelling entry point at current levels, assigning it a Buy rating. (To watch Pythia Research's track record, click here) Amongst Walls Street's analysts, Joby claims a mix of 3 Buys and Holds, each, and an additional 1 Sell, for a Moderate Buy consensus rating. Going by the $8.86 average target, a year from now, shares will be changing hands for a 0.34% premium — not exactly something to write home about. (See Joby stock forecast) To find good ideas for stocks trading at attractive valuations, visit TipRanks' Best Stocks to Buy, a tool that unites all of TipRanks' equity insights.
