Concerns about dilution and a broader sell-off sent the stock lower in October.
IonQ's revenue grew 287% in the second quarter compared to the year prior.
It's been a rough month for IonQ (NYSE: IONQ) as the quantum computing company's shares slid more than 30%. The main issues with the stock seem to be fears of shareholder dilution and a broader sell-off in the tech and quantum industries. Looking ahead to 2027, the question is whether IonQ is still worth buying.
IonQ's second-quarter earnings showed incredible growth, with revenue topping $80 million. That's a 287% year-over-year jump. But IonQ remains unprofitable, posting a $120.3 million EBITDA loss last quarter.
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IonQ agreed to acquire microsegmentation software specialist Elisity in an all-stock deal for $1.3 billion earlier in October. The company then announced a $2 billion equity offering two days later. There's also concern that IonQ's lofty valuation no longer makes sense. Even after the significant pullback, the company's trailing price-to-earnings ratio remains above 100.
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IonQ is a high-growth company, and it can afford to keep spending. It ended the second quarter with $3 billion in cash, equivalents, and investments. Revenue continues to scale rapidly, and after the acquisition of semiconductor fabricator SkyWater at the end of July, the trapped-ion technology business expects revenue to hit $450 million to $460 million.
There's still plenty of risk associated with IonQ and the quantum computing industry as a whole. For risk-tolerant investors with plenty of patience and an appetite for volatility, IonQ's trajectory looks appealing so long as the growth outpaces the dilution and spending. At some point, the company needs to show a path to profitability. I'll be waiting on the sidelines until then.
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Catie Hogan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends IonQ. The Motley Fool has a disclosure policy.