Quantum (QMCO) jumped 55% after posting one of its strongest quarters and showing clear signs of a turnaround. The results were well ahead of expectations, and the company reported its first positive adjusted EPS since 2023. Following the report, five-star Lake Street analyst Jacob Stephen raised his price target to $24 from $20 and kept a Buy rating, saying the quarter showed “a meaningful inflection” in Quantum’s core business.
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Currently, Stephen ranks 402 out of 12,464 analysts tracked by TipRanks. He has an overall success rate of 56%, with an average return per rating of 27.7% over a one-year timeframe.
A Big Beat and a Big Raise
Quantum reported Q1 revenue of $80.8 million, up 26% from last year and above $75 million guidance. Gross margin jumped to 39.3%, aided by better pricing and stronger fixed cost leverage. Adjusted EBITDA came in at $8 million, far above the $1.5 million consensus.
Adjusted EPS swung to $0.18, a major improvement from a loss of $1.58 per share last year. Demand was strong across regions, with record backlog and a growing pipeline of large enterprise deals.
The company ended the quarter with $54.6 million in cash and no debt, after using proceeds from a private placement to fully repay outstanding borrowings. The stronger balance sheet gives the company more room to invest and scale as supply constraints ease. For Q2, it expects revenue to be about $82 million, ± $2 million, well above the consensus of $74.75 million. Also, QMCO projects positive adjusted EPS between $0.02 and $0.22, compared with the analysts’ estimates of a loss of $0.03.
Analyst View and New Price Target
Stephen said the quarter showed the “leverage inherent in the model,” pointing to high‑30% gross margins, positive adjusted EPS, and strong demand across end markets.
He noted that Quantum’s valuation, about 1.3x EV/Revenue, is still too low given how much its earnings power has improved. He compared it to Tier 1 conglomerates valued around 1.8× and flash‑storage peers near 7.5×, arguing Quantum looks undervalued relative to both groups.
With stronger fundamentals and a debt‑free balance sheet, Stephen raised his price target to $24, based on a 2.5x EV/Revenue multiple on FY2028 estimates.
Is QMCO a Strong Buy?
Turning to the Street, Quantum stock carries a Moderate Buy consensus based on one Buy and one Hold assigned in the past three months. The average QMCO stock price target is $18.50, which implies over 1% upside from the current price.
