D-Wave Quantum (NYSE:QBTS) recently reported revenue growth of 235% for the first three quarters of 2025, driven by increasing adoption of its quantum annealing technology for real-world problem solving. This strong client traction and validation are attracting more investor attention.

D-Wave Quantum’s shares have been on a wild ride. After a sharp rally that saw its year-to-date share price return soar 133.19%, momentum has cooled in the past month with a 36.04% drop. Even as recent revenue milestones and high-profile customer wins fuel long-term optimism, volatility is par for the course with emerging tech stocks. Despite the setback, the company’s massive 717.88% one-year total shareholder return shows the market’s appetite for quantum computing stories remains strong.

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But with revenue soaring and analyst optimism climbing, is D-Wave’s stock still undervalued after its recent pullback? Or is Wall Street already pricing in all the potential for future growth?

Price-to-Book of 11.7x: Is it justified?

D-Wave Quantum is currently trading at a price-to-book ratio of 11.7x, making its shares notably more expensive compared to both peer companies and the broader US Software industry.

The price-to-book ratio compares a company’s market value to its book value, offering insight into how much investors are willing to pay for every dollar of net assets. For emerging, high-growth sectors like quantum computing, these multiples can run high, especially if investors expect breakout commercialization in the future. However, high ratios can also indicate that the market may be overpaying given the company’s current profitability status.

D-Wave’s premium price-to-book multiple dwarfs the US Software industry average of 3.4x and even exceeds the peer average of 10.1x. This lofty valuation level signals very high growth expectations baked into the stock. There is no fair ratio regression benchmark available to suggest the market might adjust toward a more moderate level soon.

Result: Price-to-Book of 11.7x (OVERVALUED)

However, D-Wave’s steep losses and lofty expectations mean that any slowdown in revenue growth or investor sentiment could quickly reverse its recent momentum.

Build Your Own D-Wave Quantum Narrative

If you think there’s a different angle to the story, or want to dive deeper into the numbers yourself, you can shape your own perspective in just a few minutes: Do it your way

A great starting point for your D-Wave Quantum research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.