IonQ
Quantum computer maker IonQ Inc. (NYSE: IONQ) watched its stock soar by about 240% in the six weeks after its October 2021 SPAC merger was completed. The company raised some $636 million in the deal at a market cap of $2 billion. After dropping more than a third since its launch day price, the company’s market cap has dropped to $1.2 billion.
Since its post-launch low in mid-May, however, shares are up about 27.5%. Growth forecasts are far better than the stock price indicates, but recent economic events have not favored growth stocks. Here’s a recent look at a handful of publicly traded quantum computing companies.
Just five analysts cover the stock and four have a Buy or Strong Buy rating. The stock trades at around $6.30, implying an upside potential of 90.5% based on a median price target of $12.00. At the high target of $15.00, the upside potential is about 138%.
Second-quarter revenue is forecast at $2.39 million, up 22.5% sequentially. The company is expected to post an adjusted loss per share of $0.08, compared to a loss per share of $0.09 in the prior quarter. For the full year, the net loss per share is forecast at $0.30 on revenue of $10.64 million, up more than 400% year over year.
IonQ is not expected to post a profit in 2021, 2022 or 2023. The enterprise value to sales multiple for 2022 is estimated at 74.3 times sales, 41.7 times estimated 2023 sales of $18.99 million and 15.0 times estimated 2024 sales of $52.87 million. The company does not pay a dividend and the total shareholder return for the past year was negative 39.3%.
Tencent Music
Tencent Music Entertainment Group Inc. (NYSE: TME) is China’s largest online music entertainment platform and a subsidiary of Tencent Holdings, which also owns WeChat. Over the past year, the share price has dropped by about 58.6%. That is a big improvement over the 87% dip recorded a week before Tencent Music reported first-quarter results. That surprise beat sent the stock to its 52-week high. Like many other Chinese companies with U.S. listings, Tencent Music has benefited from a looser regulatory environment this year.
Enthusiasm for the company’s stock is no better than mediocre. Only eight of 20 analysts have a Buy or Strong Buy rating, while 10 others rate the shares at Hold. At a share price of around $4.40, the potential upside based on a median price target of $5.26 is about 19.5%. At the high target of $7.95, the implied upside is 80.7%.
Analysts expect the company to post second-quarter revenue of $989.25 million, down 5.6% sequentially and 25.3% lower year over year. Adjusted earnings per share (EPS) are pegged at $0.08, down a penny sequentially and 20% lower year over year. For the full 2022 fiscal year, EPS is forecast at $0.33, down 15.8%, on revenue of $4.05 billion, down 17.5%.
The stock trades at 13.5 times expected 2022 EPS, 12.5 times estimated 2023 earnings of $0.35 and 11.4 times estimated 2024 earnings of $0.39 per share. Tencent Music’s 52-week range is $2.95 to $10.38. The company does not pay a dividend. Total shareholder return over the past 12 months was negative 57.9%.
Originally posted at 24/7 Wall St.
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