IonQ: the quantum revenue leader, priced as if the fault-tolerant win is already banked
Revenue rose 287% to $80.1m in Q2 2026, but growth is being bought at falling margins and the price sits above even our $37 bull value. We initiate at Sell with a $15 target.
The full 54-page report
Sign in to read the complete analysis, estimates and model detail.
Key takeaways
- About 46% of the $280m to $290m FY26 IonQ-only guide is acquired, not organic
- Gross margin fell from 59.8% in Q2 2025 to 24.9% in Q2 2026
- Free cash flow was negative $273m in H1 2026; $1.9bn of pro forma net cash funds about four years
- Initiate at Sell with a $15 target, 65.8% below the price
Investment thesis
The commercial lead is real, but about 46% of the FY26 IonQ-only revenue guide is acquired rather than organic, gross margin has fallen from 59.8% to 24.9% in a year, and the price needs a bull case we cannot underwrite: $43.91 implies about 50% annual revenue growth to 2035 at a 30% adjusted EBITDA margin.
Valuation
Our $15 target weights a probability-weighted DCF ($12; WACC 12%, terminal growth 3.5%) at 60% and a sum of the parts ($19) at 40%. The shares trade at 34.9x FY26E EV/sales against 3.8x to 18x for IBM, Nvidia and Alphabet.
Our estimates
| Line | FY26E | FY27E | FY28E |
|---|---|---|---|
| Revenue | $455m | $930m | $1,180m |
| EPS | −$2.80 | −$3.15 | −$2.55 |
Risks to our view
- Early proof of fault tolerance, or selection for DARPA QBI Stage C
- Faster government quantum spending after the June 2026 executive orders
- A short squeeze in a stock with a beta of 3.3
- Upside from SkyWater synergies