Quantum-SI Incorporated

Quantum-SI Incorporated (NASDAQ: QSI) is a life sciences company. The Company has designed and developed a hardware, consumable and software solution to provide a solution for protein detection and analysis. It has developed a proprietary universal single-molecule detection platform enables Next-Generation Protein Sequencing (NGPS), the ability to sequence proteins. Its launched product consists of Platinum, the Platinum Analysis Software and consumables.

Recent Business and Financial Updates

• Revenue Performance and Market Adoption:
  • The company reported revenue of USD 787,000 for the third quarter of 2024, marking continued progress in its commercialization efforts. Year-to-date revenue as of September 30, 2024, reached USD 1.9 million, reflecting the growing adoption of the Platinum® platform across key markets. The integration of Platinum® Next-Generation Sequencing by Liberate Bio into its gene therapy development platform further highlighted its enhanced targeting capabilities.
  • Additionally, the company’s technology demonstrated its effectiveness in proteomics analysis at the Human Proteome Organization World Congress 2024 in Dresden, Germany. A recent BioRxiv publication from the University of Virginia showcased Platinum’s ability to distinguish peptide variants at single amino acid resolution, underscoring its precision and utility in research and development.
• Strengthening the Executive Team: The company strengthened its leadership with key appointments to drive strategic and operational growth. Todd Bennett was named Chief Commercial Officer (CCO), bringing extensive experience in driving commercial execution. John Vieceli, Ph.D., was appointed Chief Product Officer to lead product innovation, while Lindsay Thompson assumed the role of Chief Human Resources Officer, enhancing the company’s organizational capabilities. These leadership additions are expected to accelerate sales efforts and expand the company’s market presence.
• Gross Margin and Expense Management
  • The company achieved a gross profit of USD 367,000 for the third quarter, with a gross margin of 47%. On a year-to-date basis, gross profit stood at USD 990,000, reflecting a gross margin of 53%. Management noted that gross margins are likely to remain variable in the near term due to product mix changes and ongoing commercialization efforts.
  • Total operating expenses for the third quarter were USD 28.5 million, compared to USD 27.3 million in the prior year. Adjusted operating expenses were USD 26.0 million, reflecting a slight increase over the USD 23.9 million recorded in the same period last year. Year-to-date adjusted operating expenses totaled USD 72.3 million, a marginal decline from USD 72.6 million in the prior year, driven by streamlined R&D initiatives and operational efficiency improvements.
• Net Loss and Adjusted EBITDA Performance: The company reported a net loss of USD 25.3 million for the third quarter, compared to USD 24.7 million in the prior year. For the nine months ending September 30, 2024, net loss improved to USD 67.9 million, down from USD 73.9 million in the same period last year. Adjusted EBITDA for the third quarter was negative USD 24.5 million, compared to negative USD 22.6 million in the prior year, while year-to-date adjusted EBITDA stood at negative USD 67.7 million, reflecting incremental improvements year-over-year.
• Strong Cash Position and Financial Outlook: The company maintained a robust cash position, with cash, cash equivalents, and marketable securities totaling USD 196.3 million as of September 30, 2024. Management provided updated financial guidance, projecting full-year adjusted operating expenses of approximately USD 100 million and cash usage of around USD 92 million. Current cash reserves are expected to fund operations through the second half of 2026, ensuring a stable financial runway to support growth initiatives.
• Future and Innovation Roadmap:
  • Jeff Hawkins, President and CEO, highlighted continued advancements in commercial execution and product innovation. Despite observing some lengthening of sales cycles during the third quarter, Hawkins reaffirmed confidence in the long-term growth trajectory of the Platinum® platform and the broader proteomics market. The company remains on track to launch two new library preparation and barcoding kits by year-end, further driving adoption and revenue growth.
  • Looking ahead, the company will outline its strategic roadmap and growth opportunities at its Investor Day on November 20, 2024. Management remains optimistic about delivering consistent quarter-over-quarter growth, supported by innovation, operational efficiency, and expanding market adoption.
    

Technical Observation (on the daily chart):

The Relative Strength Index (RSI) over a 14-day period stands at a value of 53.53, recovering from overbought zone, with expectations of a consolidation or an expectation of above momentum if the current support levels of USD 1.30-USD 1.50 hold. Additionally, the stock's current positioning is above the 50-period SMA and 200-period SMA, which may serve as dynamic short to medium-term support levels.  

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Speculative Buy’ rating has been given for Quantum-SI Incorporated (NASDAQ: QSI) at the closing market price of USD 1.50 as of December 16, 2024. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is December 16, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.