Quantum Computing: Irrational Exuberance
Summary
- I am usually positive on Seeking Alpha stocks rated a 'Strong Buy', given the Quant Rating system's long term record in beating the S&P500. But I thinkQUBT is an exception.
- Despite a $3 billion market capitalization, TTM revenues are tiny at only $400,000. The hype around the NASA deal is unjustified as it is only worth $26,163.
- QUBT is bleeding money and has been saved by a $90 million raise in the last 2 months, management has made questionable capital allocation choices and directors seem overpaid.
- Valuations indicate irrational exuberance at MCAP/TBV of 32x. Technicals look bullish but the hype-based euphoria is likely to reverse sharply.
- Amusingly, the company's origins are in a completely different industry; it made a huge pivot from beverages to quantum computing back in 2018.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of VOO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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