Why Quantum Computing Stock Ripped Higher Today
Key Points
Quantum Computing beat on sales and on earnings, too, last night.
Acquisitions of subsidiaries (and their revenue streams) helped to secure the sales beat.
Quantum Computing (NASDAQ: QUBT) stock soared 19.2% through 10:55 a.m. ET Tuesday after exceeding expectations for Q1 earnings last night.
Heading into the report, analysts forecast the eponymous quantum computing stock would lose $0.04 per share on sales of $2.8 million. In fact, Quantum Computing lost only $0.02 per share and reported quarterly sales of $3.7 million.
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Quantum Computing Q1 earnings
Never underestimate the power of easy comparisons in start-up companies. One year ago, Quantum Computing had just $39,000 in quarterly revenue -- this time around, it collected 95 times that.
Quantum won't be able to repeat this feat for too many more quarters, but it sure sounds nice while it lasts!
Helping the company accomplish this were two acquisitions made in the quarter, made possible by Quantum Computing's massive $1.4 billion cash war chest. Each of Luminar Semiconductor, Inc. ("LSI") and NuCrypt, LLC contributed their respective revenue streams to Quantum Computing's total revenue haul, and Quantum admitted that these acquisitions "primarily" drove its revenue growth.
What's next for Quantum Computing stock?
Would it be better news if Quantum Computing had grown its revenues "primarily" by selling a lot of quantum computers? Of course it would. But Quantum is working on that, as well.
Management noted it has $16 million in backlog, which is nearly four times the revenue Quantum Computing collected over the past year, and should help the company to maintain sales momentum.
Granted, at $2.2 billion in market capitalization (more than 2,300 times trailing sales), investors are probably being a bit irrationally exuberant about the stock. Most analysts don't expect Quantum Computing to turn profitable before 2029 at the earliest.
For the time being, though, Quantum Computing remains a momentum stock. Today, the momentum is firmly in its favor.
Should you buy stock in Quantum Computing right now?
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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