IonQ Is Trading At Dangerous, Speculation Level Valuations (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• IonQ's revenue guidance is significantly below expectations, and management's cessation of bookings disclosures reduces top-line visibility, raising concerns for GARP-oriented investors.
• Despite worsening FCF burn due to increased SG&A expenses, IonQ has a solid liquidity runway of over 5 years, bolstered by recent funding.
• The acquisition of ID Quantique to enhance IonQ's quantum networking IP portfolio makes sense. And I think it is occurring at a reasonable valuation.
• IonQ trades at a 42% discount to peers, but I think a 1-yr fwd EV/Revenue multiple of 57x is still high. The technicals suggest further downside as well vs S&P500.
• IONQ stock may be a crowded bearish trade. So a short squeeze risk is something I am watching out for by tracking the short interest.

Read the full article here.