The IonQ stock price has moved into a bear market this year as the hype surrounding quantum computing companies fade. It has crashed by over 45% and is hovering at its lowest level since January 14 this year.
Why the IonQ share price has crashed
IonQ’s crash has coincided with that of other quantum computing stocks. Rigetti Computing stock has plunged by over 55% from the year-to-date high. D-Wave Quantum (QBTS) stock has plunged by 45% from the same point.
The IonQ stock price will be in the spotlight this week as the company publishes its financial results. These numbers will provide more information about its business trajectory and whether it benefited from the quantum computing hype.
The average revenue estimate among analysts is that it made $10.28 million in the fourth quarter, a 68% increase from the same quarter in 2023. This revenue growth will bring the annual figure to $83 million.
Analysts also expect the company to issue a Q1 revenue guidance of $16.25%, which will represent a growth rate of 114%.
IonQ is not well-followed by Wall Street analysts. Only Goldman Sachs, Benchmark, and Needham track it. It has missed its analysts estimates in the last three consecutive quarters.
These analysts anticipate that the loss per share will be 12 cents, an improvement from the 24 cents it lost a year earlier.
A key area of concern about IonQ is whether it will continue to see more demand in the future. Jensen Huang, the founder and CEO of NVIDIA believes that the era of quantum computing is still far away. This is a notable thing since Huang is regarded as one of the top experts in the tech industry.
The other main issue with the IonQ stock is that it is a very overvalued company. While its market cap has dropped a bit lately, it still spots a $6.5 billion valuation. That is a big number for a company whose revenue for this year is expected to be $83 million. That implies a forward price-to-sales ratio of 78, a big number considering that NVIDIA has a forward P/S ratio of 25.
IonQ stock price analysis
IonQ stock chart by TradingView
The daily chart shows that the IonQ share price has crashed this year as the hype surrounding quantum computing faded, as we predicted here.It has moved from the all-time high of $54.47 in January to the current $32.
IonQ shares have plunged below the 50-day moving average and has formed a head and shoulders pattern. That is a sign that the stock will have a bearish breakdown after it publishes its financial results.
If this happens, the stock may drop to the psychological point at $20 after earnings. A move above the resistance at $36 will invalidate the bearish view.
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