IonQ: This Quantum Computing Stock Has Stronger Fundamentals But Is Priced Dearly

Summary:

• IonQ has various competitive advantages that reduce risks for investors; a commercial-first philosophy, a marquee customer list and broad ecosystem support; fast progress in meeting R&D milestones.
• Revenue growth is healthy, growing at 100% YoY. Deal wins are even stronger as it is winning more than $50 million deals already.
• Valuations are at an 88% premium to historical median levels on a 1-yr fwd P/Revenues basis and at a discount vs other quantum computing stocks, that are arguably overvalued.
• IONQ vs SPX500 technicals are bullish but is at a potential resistance level, increasing the chances of a correction.
• Weak revenue guidance for Q4 FY24 was surprising. It is a risk monitorable that may indicate softer bookings and billings in the Dec’24 quarter.

Thesis

The quantum computing theme seems to be very hot over the past few weeks, which has prompted me to deep-dive into these stocks recently. In this article, I am looking at IonQ (NYSE:IONQ). Over the last week, I have

Analyst’s Disclosure: I/we have a beneficial long position in the shares of VOO, AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.