Quantum computing firm IonQ Inc. (IONQ) received a price target hike from Morgan Stanley’s top analyst Joseph Moore just ahead of its third-quarter results, due after the market closes on November 5. Moore reiterated his “Hold” rating, while raising the price target from $32 to $58, implying 8.7% upside potential. He expects a solid revenue beat and a “bullish outlook” in IonQ’s Q3 report.
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Moore is a five-star analyst on TipRanks, ranking #286 out of 10,109 analysts tracked. He has a 61% success rate and an average return per rating of 16.60%.
It is worth noting that Morgan Stanley Investment Management (MS) recently revealed that it owns about 18.4 million IonQ shares, which equals a roughly 7% stake.
IonQ Could Beat Revenue Estimates
Wall Street expects IonQ to post a loss of $0.44 per share, higher than the prior year quarter’s loss of $0.24 per share. However, revenue is expected to surge 118% year-over-year to $26.99 million.
Moore expects stronger revenue and a positive outlook from IonQ’s management following recent technology development agreements signed by the Trump administration with the UK, Korea, and Japan, which specifically highlight quantum technology. These agreements are expected to benefit IonQ, which has a presence in all these regions, prompting Moore to raise his price target.
Nonetheless, the analyst maintains his Hold rating since he believes the stock price is unlikely to rise much until IonQ shows clearer progress in turning its technology into profitable products and the market conditions change.
Why Are Quantum Computing Firms Loss-Making?
Quantum computing companies like IonQ remain loss-making due to heavy investment in research and development. IonQ’s competitors, D-Wave Quantum (QBTS) and Rigetti Computing (RGTI), also report losses. IonQ uses a trapped-ion approach, which is more economical than the popular superconducting method because it operates at room temperature.
Although IonQ has surpassed earnings estimates only three times in the past eight quarters, it has consecutively exceeded revenue expectations.
Is IONQ a Good Stock to Buy?
On TipRanks, IonQ has a Strong Buy consensus rating based on six Buys and two Hold ratings. The average IonQ price target of $68.29 implies 27.9% upside potential from current levels. Over the past year, IONQ stock has rocketed nearly 248%.
