QUBT · Quantum Computing
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $7.46
Note written ·
Price against the kill line
25.5% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $7.46, on record since 11 November 2026. The shares are down 38.6% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $7.46, the 50-day average of closes as of 11 November 2026, which would show the shares leading the S&P 500. The company reporting contract backlog above the $42.5 million of 30 June 2026 would also prove the call wrong.
Research onlyNot in the portfolio.
Key figures from the filings · Technology
Quarter to 30 September 2026, filed 9 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 9.5
- Revenue, change on a year (%)
- +2374.0
- Gross margin (%)
- 4.5
- Operating margin (%)
- −300.9
- Free cash flow, four quarters ($M)
- −61.1
- Free-cash-flow yield (%)
- −4.8
All filed numbers
What Quantum Computing reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 9.5 | +2374.0 | 4.5 | −300.9 |
| first filed | 5.6 | +9000.0 | −21.0 | −414.6 |
| first filed | 3.7 | +9364.1 | −19.5 | −556.8 |
| first filed | 0.2 | +219.4 | −49.5 | −11220.2 |
| first filed | 0.4 | +280.2 | 32.8 | −2709.4 |
| first filed | 0.1 | −66.7 | 42.6 | −16673.8 |
| Pre-tax income ($M) | −15.1 |
| Net income ($M) four quarters: −32.5 | −15.1 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +35.1 |
| Operating cash flow ($M) | −46.0 |
| Capital spending ($M) | 15.1 |
| Free cash flow ($M) | −61.1 |
| Cash and short-term investments ($M) | 902 |
| Debt ($M) | Not available |
| Net cash, cash less debt ($M) | Not available |
| Deferred revenue ($M) +1188.5% on a year | 4.2 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 8.3 |
| Inventory ($M) | 10.6 |
| Shareholders' equity ($M) | 1,580 |
| Market value ($M) | 1,262 |
| Enterprise value, market value plus net debt ($M) | Not available |
| Enterprise value to sales (×) | Not available |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | Not meaningful |
| Price to book value (×) | 0.8 |
| Free-cash-flow yield (%) | −4.8 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 30.9% of shares outstanding sold short, 9.5 days of average trading to cover, +4.0% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $0 |
| 12 monthsfrom | $0 | $648K |
The thesis
Quantum Computing Inc. is more likely to lag the S&P 500 over the next three months. Its third-quarter 2026 revenue rose to $9.5 million, but the company credits acquisitions for the growth. The gross margin was 4.5%, and contract backlog fell to $39.1 million. Proof that Dirac-3S machines are shipping, and backlog growing again, would show the case turning.
The report met the narrow test the case had set. Revenue of $9.500 million beat the second quarter's $5.551 million, and gross profit was $428 thousand on $9.072 million of cost of revenue (the 9 November 2026 results 8-K). The market judged the rest of the report. The shares closed at $6.86 on 9 November 2026, before the release, then at $6.30 on 10 November 2026 and $6.17 on 11 November 2026.
The rating is Low because the quarter's growth came from purchased businesses with almost no margin. Operating costs rose faster than sales. Interest income on the cash pile was larger than revenue.
Bullish and bearish views on Quantum Computing Inc.
The bull case on Quantum Computing Inc. (QUBT), in brief: revenue beat the estimate. The bear case: backlog shrank during the quarter.
Bull case
- Revenue beat the estimate. Third-quarter 2026 revenue was $9.500 million, against a $7.215 million estimate and $384 thousand a year earlier (Benzinga, 9 November 2026; results 8-K). Nine-month revenue was $18.7 million.
- Gross profit turned positive. Revenue exceeded cost of revenue by $428 thousand in the third quarter (results 8-K, 9 November 2026). In the second quarter, cost of revenue had exceeded revenue (Q2 2026 10-Q).
- Cash funds years of losses. The company reported about $1.3 billion of cash, cash equivalents and investments at 30 September 2026, of which $174.3 million was cash and equivalents (results 8-K, 9 November 2026).
- First pharmaceutical customer signed. On 14 October 2026, INmune Bio and the company announced a Dirac-3S collaboration on INmune Bio's drug candidate XPro. The Q3 release calls this the company's first commercial customer in pharmaceuticals and biotechnology.
- Dirac-3S shipments are guided. On 1 October 2026 the company guided to first shipments of the Dirac-3S machine in November 2026. The Q3 release does not mention them.
Bear case
- Backlog shrank during the quarter. Contract backlog was about $39.1 million at 30 September 2026, down from about $42.5 million at 30 June 2026 (Q3 and Q2 results releases).
- Growth is bought, at thin margin. The company attributes revenue growth to its 2026 purchases of Luminar Semiconductors, NuCrypt and NHanced Semiconductors (results 8-K, 9 November 2026). It does not separate organic revenue, and the gross margin was 4.5%.
- Costs are outrunning sales. Third-quarter operating expenses were $29.0 million, against $10.5 million a year earlier, with general and administrative costs of $15.4 million against $5.2 million (results 8-K; Benzinga, 9 November 2026).
- Interest income carries the income statement. Interest and other income was $13.0 million, larger than revenue, and the net loss was $15.1 million, or $(0.07) per share against a $(0.05) estimate (results 8-K; Benzinga, 9 November 2026).
- No outlook was given. The Q3 release gives no revenue guidance and no Dirac-3S shipment date. A post-quarter subcontract is mentioned only in its forward-looking statements, without a value.
Price setup
The shares closed at $6.17 on 11 November 2026, 57.3% below the 52-week intraday high of $14.45 set on 12 May 2026. The 52-week closing low is $5.63, set on 5 November 2026. The shares are down 30.8% from the $8.92 close of 13 August 2026 (adjusted daily closes).
The report moved the price the wrong way for the case. The close fell from $6.86 on 9 November 2026 to $6.30 on 10 November 2026, the first session after the release. That undid most of the rebound from $5.63 on 5 November 2026. The last close sits below both the 50-day average of closes and the 200-day average of $8.52 (adjusted daily closes, 11 November 2026). The price already reflects a revenue beat that investors priced as acquired and low-margin. Shares now trade near the year's closing low.
Short interest was 64,702,416 shares, or 32.31% of Benzinga's stated float, at the 15 September 2026 settlement. That is the latest figure found. A short base that large can drive sharp rallies on a product headline, which is the main way the shares could lead without a change in the business.
Catalysts ahead
- ~30 November 2026 (est.): First Dirac-3S shipments, guided by the company on 1 October 2026 for November 2026. A dated shipment with a named customer would be the first sales evidence for the company's own new machine. The Q3 release did not mention it.
- ~15 March 2027 (est.): Q4 and full-year 2026 report. Backlog against $39.1 million, gross margin against 4.5% and operating expenses against $29.0 million show whether the acquired businesses grow profitably.
What would change the view
A daily close above $7.46, the 50-day average of closes as of 11 November 2026, which would show the shares leading the S&P 500. The company reporting contract backlog above the $42.5 million of 30 June 2026 would also prove the call wrong.
What it trades with
Quantum Computing Inc. trades with other listed Quantum computing companies and with retail-favoured, high-volatility technology shares. The link is loose session to session. D-Wave Quantum was reported surging on 6 November 2026, while QUBT closed at $6.33 that day. The company's large cash and investment balance makes its reported earnings sensitive to interest rates: interest and other income was $13.0 million in the third quarter of 2026, against $3.5 million a year earlier.
The evidence, claim by claim (8)
- Q3 2026 revenue was $9.500 million, cost of revenue $9.072 million and gross profit $428 thousand, a 4.5% gross margin. Quantum Computing Inc. Q3 2026 results, Form 8-K · as of
- Contract backlog was about $39.1 million at 30 September 2026, down from about $42.5 million at 30 June 2026. Q3 2026 and Q2 2026 results releases · as of
- Q3 2026 operating expenses were $29.0 million versus $10.5 million a year earlier; G&A was $15.4 million versus $5.2 million. Q3 2026 results, Form 8-K; Benzinga 9 November 2026 · as of
- Q3 2026 EPS was $(0.07) against a $(0.05) estimate; revenue of $9.500 million beat a $7.215 million estimate. Benzinga, 9 November 2026 · as of
- Q3 2026 interest and other income was $13.0 million and the net loss was $15.1 million. Q3 2026 results, Form 8-K · as of
- Cash, cash equivalents and investments were about $1.3 billion at 30 September 2026, including $174.3 million of cash and equivalents. Q3 2026 results, Form 8-K · as of
- Short interest was 64,702,416 shares, or 32.31% of Benzinga's stated float, at settlement. Benzinga short-interest calendar · as of
- The company guided to initial Dirac-3S shipments in November 2026. Company news, 1 October 2026 · as of
Sources
- Quantum Computing Inc. - Form 8-K - FY2026 · sec.gov
- QCi’s quantum revenue jumps with third quarter acquisitions · quantumzeitgeist.com ·
- QCi’s $13M Interest and Other Income Is 1.4x Its $9.5M Sales · fourweekmba.com
- Quantum Computing Inc. (QUBT) Q3 2026 earnings review · finsee.ai
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