On Friday, Benchmark updated its stance on D-Wave Quantum (NASDAQ:QMCO) Inc. (NYSE:QBTS), significantly increasing the stock's price target from $3.00 to $8.00 while keeping a Buy rating. The adjustment comes after the Benchmark analyst's meeting with D-Wave's CFO, John Markovich, at the Benchmark's Discovery (NASDAQ:WBD) Conference.
The optimism toward the quantum computing sector has been growing, influenced by a series of industry and company-specific announcements in recent weeks. These developments have contributed to an uptick in the stock's valuation. Benchmark's new price target is based on a 22x enterprise value to sales (EV/Sales) multiple applied to their 2027 revenue forecast of $84 million. This valuation is slightly below the 28x average multiple observed among D-Wave's peers.
The company is anticipated to benefit from the National Quantum Initiative Act (NQIA) over the coming five years. The NQIA is designed to accelerate quantum research and development for the United States. Benchmark sees potential for additional gains if D-Wave successfully increases its hardware sales.
Benchmark also expects that D-Wave will experience an increase in the speed of converting sales to deployments. This acceleration is likely to be driven by the company's revised go-to-market strategy, iterative efficiency enhancements, and the strategic repurposing of its software and application intellectual property blocks.
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