IonQ (IONQ), a frontrunner in the race for quantum computing, posted Q3 revenue that exceeded expectations, helping to drive the stock up over 268% in the past 90 days. The company has announced new bookings worth $63.5 million and has revised its revenue outlook for 2024, projecting between $38.5 million and $42.5 million on bookings of $75 million to $95 million. With strategic partnerships and acquisitions, IonQ is expanding its reach in the quantum networking landscape and gaining a competitive edge. The company’s strong execution and expanding clientele paint a promising picture for forward-looking investors.
IonQ’s Making Progress on Several Fronts
IonQ is a company that develops general-purpose quantum computing systems. It sells access to quantum computers of differing qubit capacities and allows access through various cloud platforms. These platforms include Amazon Web Services (AMZN), Amazon Bracket, Microsoft’s Azure Quantum (MSFT), Google’s Cloud Marketplace (GOOGL), and its own cloud service. In addition to this, IonQ offers contracts related to the design, development, and construction of specialized quantum computing hardware systems. It also provides maintenance, support, and consulting services for co-developing algorithms on quantum computing systems.
IonQ has reported a $54.5 million agreement with the United States Air Force Research Lab (AFRL) to create quantum networking hardware. This agreement is a significant step, marking the expansion into commercialization for quantum networking. Furthermore, IonQ has partnered with the University of Maryland, Qubitekk, AstraZeneca, and Ansys to bolster its standing in the quantum computing and networking domain.
Moreover, IonQ has strengthened its foothold in the quantum networking market by acquiring Qubitekk, a quantum networking company. This addition to IonQ’s business brings in supplementary expertise, technology, and patents, further fortifying its dominance in quantum computing and quantum networking.
The company continues to advance the technological boundaries of quantum computing, recently showing remote ion-ion entanglement. It also works with NKT Photonics to create laser systems for future quantum computers. It is collaborating with Imec to develop photonic integrated circuits and chip-scale ion trap technology, aiming to improve the performance, scalability, and cost-effectiveness of IonQ’s quantum systems.
IonQ’s Recent Financial Results
The company recently posted its Q3 financial results. Revenue of $12.4 million exceeded analysts’ expectations while posting a year-over-year 102% increase over the $6.1 million posted in 2023. However, the company posted a net loss of $52.5 million, with an adjusted EBITDA loss of $23.7 million. Notably, this EBITDA figure excludes a non-cash loss of $3.9 million related to evaluating IonQ’s warrant liabilities. GAAP earnings per share (EPS) of -$0.24 missed consensus estimates by $0.02.
As of the quarter’s end, the company’s cash, cash equivalents, and investments were reported to be $382.8 million as of September 30, 2024.
IONQ’s management has updated its revenue forecast for the full year of 2024, now expecting to make between $38.5 million and $42.5 million. This includes an anticipated revenue between $7.1 million and $11.1 million for the year’s fourth quarter. The company maintains its previously stated bookings range between $75 million and $95 million.
Is IONQ Stock a Buy?
Shares of IONQ have been on an upward trend, climbing over 96% in the past year. The stock trades at the high end of its 52-week price range of $6.22 – $22.62 and shows strong price momentum as it trades above all major moving averages. The P/B ratio of 12.3x sits well above the Computer Hardware industry average of 3.3x, suggesting the stock’s potential growth is being price-in to a degree.
Analysts following the company have been constructive on IONQ stock. For example, Craig-Hallum analyst Richard Shannon reiterated a Buy rating while raising the price target on the shares to $22 from $15, noting the company continues to pile up large bookings from government and commercial customers, with more government spending worldwide likely coming.
Based on four analysts’ recent recommendations, IonQ is rated a Strong Buy overall. The average price target for the stock is $19.23, representing a potential decline of -22.43% from current levels.
Bottom Line on IonQ
IonQ continues to forge new frontiers in quantum computing with its recent innovative advances, including remote ion-ion entanglement and collaborative efforts toward creating laser systems for future quantum computers. Having surpassed Q3 revenue expectations, the company forecasts a robust revenue outlook for 2024. Moreover, successful partnerships and acquisitions bolster its standing. The future looks promising for IonQ and its investors as it maintains an upward growth trajectory in the quantum computing market.
