Is Quantum Computing Inc. a Buy?

• Quantum Computing Inc. has minimal revenue.

• It could instrumentality 5 to 10 years earlier applicable applications of quantum computing are developed.

• The company's shares are beyond expensive.

• 10 stocks we similar amended than Quantum Computing ›

Quantum computing is 1 of the hottest concern trends close present aft artificial quality (AI), and 1 institution that has garnered a batch of attraction from investors is Quantum Computing, Inc. (NASDAQ: QUBT), besides known arsenic QCi.

The company's stock terms has climbed 526% implicit the past 3 years, arsenic investors person go progressively optimistic astir QCi's prospects. However, I'm not assured that this quantum computing banal is worthy owning. Here's why.

In its third-quarter net report, QCi reported conscionable $384,000 successful sales. You mightiness privation to work that again, because, yes, the company's gross is successful the hundreds of thousands, not millions.

Revenue that's hardly a rounding mistake for galore exertion companies is notable, particularly erstwhile you see the monolithic stock terms gains QCi's banal has experienced implicit the past respective years. If you privation a wide motion that the marketplace is grossly overvaluing companies based purely connected sentiment, look nary further than QCi's 526% summation implicit the past fewer years contempt generating conscionable $384,000 successful sales.

Some investors whitethorn person been excited to spot that QCi reported nett income of $0.01 per stock successful Q3, a important betterment from the nonaccomplishment of $0.06 per stock successful the year-ago quarter.

But that summation was mostly the effect of a $9.2 cardinal mark-to-market accommodation of a derivative liability. This means the fiscal alteration was much of a impermanent accounting payment alternatively than an indicator of the company's underlying fiscal improvements.

With its negligible income and an operating nonaccomplishment of $10.5 cardinal successful Q3, QCi has a agelong mode to spell earlier it begins to make sustained affirmative earnings.

Many maturation companies so run astatine a nonaccomplishment for a portion but past go profitable. However, the occupation is that QCi is operating successful a precise unproven market. Quantum computing is making important strides, but it's worthy noting that adjacent large players, specified arsenic Alphabet, are skeptical that applicable applications of quantum computing are astir the corner.

Consider that Google CEO Sundar Pichai said earlier this twelvemonth that "practically useful" quantum computers are inactive 5 to 10 years away. This, coming from a institution that released a groundbreaking quantum computing processor past twelvemonth and precocious utilized a quantum machine to successfully tally a verifiable algorithm connected hardware -- thing Alphabet says it did for the archetypal clip successful history.