IonQ (NYSE:IONQ) was a major beneficiary of the quantum computing hype toward the end of last year, with its shares soaring over 620% in just four months. But 2025 is shaping up to be a brutal reversal, with shares already down 41% year-to-date.
A chunk of that decline – 18%, to be exact – came in the wake of IonQ’s latest Q4 results. It’s no secret that quantum computing companies are still in the early stages, with meaningful revenue generation remaining elusive. Nevertheless, IonQ saw a big top-line improvement with sales hitting $11.7 million in Q4, amounting to a 92% year-over-year increase and beating the Street’s call by $1.42 million. The numbers weren’t quite as impressive at the other end of the spectrum with EPS of -$0.93 falling shy of the consensus estimate by $0.68.
Beyond the earnings, IonQ had plenty of news to unpack. The company named Niccolo de Masi as its new CEO, while Peter Chapman will transition to Executive Chairman of the Board. On the strategic front, IonQ struck a partnership with SK Telecom, South Korea’s largest wireless provider. It has also announced the acquisition of a majority stake in ID Quantique, a leader in quantum networking and sensing, through an all-stock deal. And if that wasn’t enough, IonQ revealed plans for a $500 million at-the-market offering, ensuring it has ample capital to navigate the challenges ahead.
Those last two bits, according to Benchmark analyst David Williams, are partly responsible for the post-earnings slump. However, Williams, who ranks in the top 3% of Wall Street stock experts, thinks that matters little as the company is hitting all the right notes.
“Despite the negative stock reaction following the print, which we think is primarily related to the dilutive effect of the capital raise and the all-stock transaction to acquire IDQ, we remain confident in the roadmap, technology, and strategy as the increasing tempo of hardware sales, bookings, and revenue, demonstrate the continued strong execution against all milestones,” the 5-star analyst said.
Additionally, while the CEO transition initially surprised Williams, management clarified that de Masi’s appointment is driven by the need for “greater executive bandwidth” to support the company’s growing business initiatives. Having worked together since IonQ went public, de Masi has been instrumental in shaping the company’s direction. “We believe he brings the right mix of business and technology acumen to continue driving progress toward commercialization,” Williams further said.
All told, Williams rates IonQ shares a Buy, yet given the dilution involved, he has lowered his price target from $50 to $45. Nevertheless, there’s still an upside of 86% from current levels. (To watch Williams’ track record, click here)
As for the broader sentiment, the 6 most recent analyst reviews split between 4 Buys and 2 Holds, landing IonQ a Moderate Buy consensus. With an average price target of $43.50, analysts anticipate a 79% surge in the coming months. (See IONQ stock forecast)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.