Penny Stock Quantum-Si Incorporated Readies For Lift-Off

Key Points

• Quantum-Si is entering hyper-growth and is expected to sustain triple-digit growth through 2025.
• Analysts see substantial upside for the market, and the chart reflects the potential. 
• The next visible catalyst is in May when the FQ1 results are released. 

Penny stocks are a dime a dozen and come with as much risk because their businesses are unproven; Quantum-Si Incorporated NASDAQ: QSI is not a run-of-the-mill 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 important for its size and cost. The device fits on a tabletop, costs less than traditional methods, and is expected to experience widespread demand.

Quantum-Si logged $400,000 in revenue in Q4 2023 following the controlled launch of the product. The company is expected to enter full-launch mode by the end of the fiscal first quarter, which is underway now. In addition to the sequencing unit, the company provides software and materials that provide a recurring revenue stream from units in place.

The company plans to drive a continuous upgrade cycle with new product launches and version updates that have already begun. The V2 sequencing kit is already being shipped to existing customers, and a V3 is expected soon. 

Analysts Lead This Market Higher; Catalysts are in Sight

Marketbeat.com tracks three analysts with ratings on Quantu-Si. The consensus is a Hold, but the price targets suggest a deep-value opportunity. The lowest target on record is 7% above the current price action, and the consensus implies a 45% upside and is rising. 

The consensus target reported by Marketbeat.com is up 13% compared to last year and may continue to increase as the year progresses. Three international partners support the company’s global launch, which may lead to better-than-expected results. The company is projecting about $4 million in FY revenue for sequential growth of 300%, and analysts forecast hyper-growth will continue in 2025. 

The margin news is mixed and may hinder price action. The company produces an above-average 45% gross margin, but R&D, scaling, and operating costs result in losses. Losses are expected to continue in the foreseeable future, but that outlook may change. Revenue growth is expected to accelerate quickly for this healthcare devices company and could outpace guidance by a wide margin, providing unforeseen leverage for earnings. 

Insiders and Institutions are Buying Quantum-Si

Quantum-Si insider activity is noteworthy for several reasons, including its history and recent volume. Marketbeat’s data shows no selling for many quarters, only buying, and the buying ramped up to a peak in Q1 2024 that is best described as a spike. Buyers include the CEO, CFO, and General Counsel, who purchased $142,000 in shares. Their activity has the insider holding up to 29%, a significant sign of confidence. 

Institutional activity is bullish. The institutions bought on balance for four consecutive quarters, including the to-date portion of Q2. They own about 40% of the stock, and ARK Investment Management is the largest holder. Ark owns about 12.5% of the stock, mostly held by the Genomic Revolution ETF. 

The Technical Outlook for Quantum-Si is Favorable to Higher Prices

The price action in Quantum-Si is range-bound but shows solid support and upward bias. The market is trying to launch along with the Platinum device but has met resistance at the $2.00 and $2.25 levels. Those levels should be tested again soon and may be broken. The next visible catalyst is the earnings report due in May, but there may be news before then. $2.00 is an important pivot for the market. If the price moves above it, it will likely advance above $2.25 before peaking. $2.25 is the critical level; a move above there that is sustained and shows support could lead this market to double again quickly.