Key points
- Quantum-Si is entering a hyper-growth phase and is expected to maintain triple-digit growth through 2025.
- Analysts see substantial upside for the market and the chart reflects the potential.
- The next visible catalyst will occur in May, when the FQ1 results are released.
- 5 titles we like more than Quantum-Si
Penny stocks are a dime a dozen and carry the same risk because their assets are unproven; Quantum-Si Incorporated NASDAQ:QSI it’s no ordinary penny stock. Quantum-Si Incorporated manufactures, markets and supports the Platinum Protein Sequencer.
It doesn’t sound like much, but Platinum is a revolutionary new protein sequencer, notable for its size and cost. The device can be placed on a table, costs less than traditional methods and is expected to see widespread demand.
Quantum-Si reported revenue of $400,000 in the fourth quarter of 2023 following a controlled product launch. The company is expected to enter full launch mode by the end of the fiscal first quarter, which is currently underway. In addition to the sequencing unit, the company provides software and materials that provide a recurring revenue stream from the units in place.
The company plans to begin a continuous update cycle with new product launches and version upgrades already begun. The V2 sequencing kit is already shipping to existing customers, and a V3 sequencing kit is expected soon.
Analysts are leading this market higher; The catalysts are in sight
Marketbeat.com tracks three analysts with ratings on Quanti-Si. Consensus is Hold, but price targets suggest a deep value opportunity. The lowest target on record is 7% above the current price movement, and the consensus implies an upside of 45% and rising.
The consensus target reported by Marketbeat.com is up 13% from last year and could continue to rise throughout the year. Three international partners are supporting the company’s global launch, which could lead to better-than-expected results. The company expects about $4 million in revenue for the fiscal year for 300% sequential growth, and analysts expect the hypergrowth to continue into 2025.
Margin news is mixed and could hamper price action. The company produces an above-average gross margin of 45%, but research and development, scaling and operating costs result in losses. Losses are expected to continue for the foreseeable future, but that outlook may change. Revenue growth is expected to accelerate rapidly for this healthcare device company and could beat forecasts by a wide margin, providing unanticipated leverage to earnings.
Insiders and institutions are buying Quantum-Si
Quantum-Si’s insider activity is noteworthy for several reasons, including its history and recent volume. Marketbeat data shows no sales for many quarters, only purchases, and purchases reached a peak in the first quarter of 2024 that is best described as a peak. Buyers include the CEO, CFO and General Counsel, who purchased $142,000 worth of shares. Their business sees insiders holding up to 29%, a significant sign of confidence.
Institutional activity is bullish. Institutions have been buying at equilibrium for four consecutive quarters, including the updated portion of the second quarter. They own about 40% of the shares and ARK Investment Management is the largest holder. Ark owns about 12.5% of the shares, held primarily by the Genomic Revolution ETF.
The technical outlook for Quantum-Si is favorable for higher prices
The price action in Quantum-Si is range bound, but shows solid support and an uptrend. The market is trying to rally alongside the Platinum device, but has encountered resistance at the $2.00 and $2.25 levels. These levels are expected to be tested again soon and may be exceeded. The next visible catalyst will be the earnings report expected in May, but there could be news before then. $2.00 is a major pivot for the market. If the price moves above that, it will likely break above $2.25 before reaching the peak. $2.25 is the critical level; a move above that level that is sustained and shows support could lead to this market quickly doubling again.
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