Toast (NYSE:TOST) & D-Wave Quantum (NYSE:QBTS) Critical Review

Toast (NYSE:TOST) and D-Wave Quantum (NYSE:QBTS) are both computer and technology companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, earnings, dividends, analyst recommendations and valuation.

Institutional and Insider Ownership

82.9% of Toast shares are owned by institutional investors. Comparatively, 42.5% of D-Wave Quantum shares are owned by institutional investors. 13.3% of Toast shares are owned by insiders. Comparatively, 7.2% of D-Wave Quantum shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Toast and D-Wave Quantum’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Toast	0.40%	1.54%	0.93%
D-Wave Quantum	-783.28%	N/A	-134.62%

Earnings & Valuation

This table compares Toast and D-Wave Quantum”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Toast	$4.96 billion	3.43	-$246.00 million	($0.01)	-3,440.50
D-Wave Quantum	$8.83 million	310.56	-$82.71 million	($0.69)	-14.76

D-Wave Quantum has lower revenue, but higher earnings than Toast. Toast is trading at a lower price-to-earnings ratio than D-Wave Quantum, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Toast has a beta of 1.99, meaning that its share price is 99% more volatile than the S&P 500. Comparatively, D-Wave Quantum has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Toast and D-Wave Quantum, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Toast	1	12	9	0	2.36
D-Wave Quantum	0	0	6	0	3.00

Toast currently has a consensus target price of $40.48, suggesting a potential upside of 17.65%. D-Wave Quantum has a consensus target price of $8.42, suggesting a potential downside of 17.36%. Given Toast’s higher possible upside, research analysts clearly believe Toast is more favorable than D-Wave Quantum.

Summary

Toast beats D-Wave Quantum on 10 of the 14 factors compared between the two stocks.

About Toast

Toast, Inc. operates a cloud-based digital technology platform for the restaurant industry in the United States, Ireland, and India. The company offers software products for restaurant operations and point of sale, such as Toast POS, Toast now, multi-location management, kitchen display system, Toast mobile order and pay, Toast catering and events, Toast invoicing, Toast tables, and restaurant retail; and hardware products, including Toast flex, Toast flex for guest, Toast go 2, Toast tap, kiosks, and Delphi by Toast. It provides toast online ordering and toast takeout, first-party delivery toast delivery services, and third-party delivery integrations and orders hub; and loyalty, email marketing, and toast gift cards. In addition, the company offers payroll and team management, Sling by Toast, Toast pay card and payout, and tips manager, as well as partner-enabled products comprising insurance and benefits; supply chain and accounting products, such as xtraCHEF by toast; and financial technology solutions consisting of payment processing, toast capital, and purchase plans. Further, it offers reporting and analytics, Toast shop, and Toast partner connect and application programming interfaces. The company was formerly known as Opti Systems, Inc. and changed its name to Toast, Inc. in May 2012. Toast, Inc. was incorporated in 2011 and is headquartered in Boston, Massachusetts.

About D-Wave Quantum

D-Wave Quantum Inc. develops and delivers quantum computing systems, software, and services worldwide. The company offers Advantage, a fifth-generation quantum computer; Ocean, a suite of open-source python tools; and Leap, a cloud-based service that provides real-time access to a live quantum computer, as well as access to Advantage, hybrid solvers, the Ocean software development kit, live code, demos, learning resources, and a vibrant developer community. It also provides D-Wave Launch, a quantum professional service that guides enterprises from problem discovery through production implementation. The company's quantum solutions are used in logistics, financial services, drug discovery, materials sciences, scheduling, fault detection, mobility, and supply chain management. It serves financial services, manufacturing/logistics, mobility, and life sciences/pharmaceuticals industries. D-Wave Quantum Inc. was founded in 1999 and is headquartered in Burnaby, Canada.