The average target price of IONQ is 40 and suggests 56% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 54.0. This translates into 110% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 29.0. This suggests 13% upside potential. Even the most pessimistic analyst believes there will be stock growth. 

IonQ, Inc. engages in the development of general-purpose quantum computing systems. It sells access to quantum computers with 20 qubits. The company makes access to its quantum computers through cloud platforms, such as Amazon Web Services' (AWS) Amazon Braket, Microsoft's Azure Quantum, and Google's Cloud Marketplace, as well as through its cloud service. IonQ, Inc. was founded in 2015 and is headquartered in College Park, Maryland.

IonQ, Inc.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

IONQ reported revenue of USD 43mn in the last 12 months, up 95% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 100% from FY23 to USD 0.00. Market expects EPS to reach USD -0.87 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 117ppts over past six months and grown 14ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -496.4% in the last 12 months, up from -668.6% in FY23. 

Historically, IONQ has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -770.0%, down from -715.8% in FY23. 

IonQ, Inc. reported a return on equity (RoE) of -76.3% in the last 12 months, down from -30.0% in FY23. The market consensus projects an RoE of -36.5% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -62.4% in the last 12 months, a decrease from -27.4% in FY23. The market analysts predict that RoA will be -31.9% in FY24, again weaker than its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -67.0%, below the peers. The consensus estimate for FY24 for RoCE is -34.1%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -2.7 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

IONQ boasts high trading liquidity. The average private investor can sell his common position in the stock immediately. Liquidity is relatively stable and remains favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, inadequate interest coverage, and poor cash flow generation. We note resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, IONQ is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, IONQ is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly overvalued relative to its peers. 

IonQ, Inc.

$ 25.74

2

IonQ, Inc.

$ 25.74

2

Risk factor

Profitability factor

Risk / Profitability

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About

Risk factor

Profitability factor

$ 25.74

About

About

IonQ, Inc.

$ 25.74

2

IonQ, Inc.

$ 25.74

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 25.74

About

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