Arqit Quantum Inc. (NASDAQ: ARQQ)

Sector: Technology Industry: Software - Infrastructure CIK: 0001859690
P/B 9.24
P/E -7.12
P/S 474.84
Market Cap 340.09 Mn
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) 0.00
Total Debt (Qtr) 971,621.62
Debt/Equity (Qtr) 0.03

About

Arqit Quantum Inc., or Arqit, is a company that operates in the information security industry, with its stock symbol being ARQQ. The company specializes in quantum-safe cybersecurity, offering a range of products designed to protect communications links from current and future cyber threats, including those from quantum computers. Arqit's main business activities revolve around the development and sale of its quantum-safe security products. These products are designed to provide secure communications for networked devices and data at rest, even...

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Analysis

Pros

  • Healthy cash reserves of 49.97M provide 139.54x coverage of short-term debt 358108.11, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 55.05M provides 56.66x coverage of total debt 971621.62, indicating robust asset backing and low credit risk.
  • Cash reserves of 49.97M provide solid 141.68x coverage of other non-current liabilities 352702.70, indicating strong liquidity.
  • Tangible assets of 55.05M provide robust 5.82x coverage of other current liabilities 9.46M, indicating strong asset backing.
  • Cash reserves of 49.97M provide robust 2.48x coverage of current liabilities 20.14M, indicating strong short-term solvency.

Cons

  • Operating cash flow of (38.53M) barely covers its investment activities of 922972.97, with a coverage ratio of -41.74, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Free cash flow of (39.27M) provides weak coverage of capital expenditures of 741891.89, with a -52.93 ratio suggesting additional external financing needs for growth initiatives.
  • High financing cash flow of 63.69M relative to working capital of 33.94M, which is 1.88x suggests concerning dependence on external funding for operational needs.
  • Operating cash flow of (38.53M) is outpaced by equity issuance of 50.25M (-0.77 ratio), indicating concerning reliance on equity markets for funding operations.
  • Tangible assets of 55.05M provide limited backing for working capital of 33.94M, which is 1.62x, suggesting increased operational risk in market downturns.

Peer Comparison

Companies in the Software - Infrastructure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MSFT Microsoft Corp 3,542.10 Bn 33.76 12.06 60.56 Bn
2 ORCL Oracle Corp 533.93 Bn 34.61 8.75 124.39 Bn
3 PLTR Palantir Technologies Inc. 437.56 Bn 399.47 112.31 0.24 Bn
4 PANW Palo Alto Networks Inc 125.16 Bn 112.03 13.10 0.35 Bn
5 CRWD CrowdStrike Holdings, Inc. 120.85 Bn -384.67 26.47 0.82 Bn
6 SNPS Synopsys Inc 71.69 Bn 35.89 11.14 15.14 Bn
7 NET Cloudflare, Inc. 67.84 Bn -658.43 33.70 3.50 Bn
8 FTNT Fortinet, Inc. 63.33 Bn 33.80 9.66 1.00 Bn

Industry Comparisons

Current Valuation

Metric Value Industry Percentile
EV to Assets 8.29 2.56
EV to Cash from Ops. -12.46 38.32
EV to Debt 493.88 -11.37
EV to EBIT -9.47 -12.79
EV to EBITDA -10.39 7.72
EV to Free Cash Flow [EV/FCF] -12.22 24.22
EV to Market Cap 1.41 0.58
EV to Revenue 670.00 -35.00
Price to Book Value [P/B] 9.24 3.74
Price to Earnings [P/E] -7.12 -18.61

Dividend Metrics

Metric Value Industry Percentile
Dividend Coverage Ratio 0.00 -0.30
Dividend Payout Ratio % 0.00 2.69
Dividend per Basic Share 0.00 0.10
FCF Dividend Payout Ratio % 0.00 1.67
Interest Coverage -780.85 -13.15

Growth Metrics

Metric Value Industry Percentile
Capex Growth (1y) % 83.06 -404.11
Cash and Equivalents Growth (1y) % 103.03 226.02
Dividend Growth (1y) % 0.00 -0.27
EBIAT Growth (1y) % 35.95 31.15
EBITDA Growth (1y) % -28.45 49.02
EBIT Growth (1y) % 31.98 25.85
EBT Growth (1y) % 32.16 17.82
EPS Growth (1y) % 49.05 70.69
FCF Growth (1y) % -5.93 295.45
Gross Profit Growth (1y) % 85.78 49.96

Liquidity Ratios

Metric Value Industry Percentile
Asset Utilization Ratio 0.02 0.68
Cash Payout Ratio 0.00 0.02
Cash Ratio 2.48 1.21
Current Ratio 2.69 2.57
Debt to Equity Ratio 0.03 -0.93
Interest Cover Ratio -780.85 -13.15
Times Interest Earned -780.85 -13.15

Profitability

Metric Value Industry Percentile
EBITDA Margin % -7,071.90 -544.82
EBIT Margin % -5,233.20 -197.78
EBT Margin % -7,080.94 -602.74
Gross Margin % 100.00 52.06
Net Profit Margin % -6,668.50 -605.52