Critical Analysis: Micron Technology (NASDAQ:MU) and IonQ (NYSE:IONQ)

Micron Technology (NASDAQ:MU) and IonQ (NYSE:IONQ) are both large-cap computer and technology companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

80.8% of Micron Technology shares are held by institutional investors. Comparatively, 41.4% of IonQ shares are held by institutional investors. 0.3% of Micron Technology shares are held by insiders. Comparatively, 5.2% of IonQ shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Micron Technology and IonQ”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Micron Technology	$37.38 billion	7.00	$8.54 billion	$7.59	30.71
IonQ	$43.07 million	477.08	-$331.65 million	($2.01)	-29.42

Micron Technology has higher revenue and earnings than IonQ. IonQ is trading at a lower price-to-earnings ratio than Micron Technology, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Micron Technology and IonQ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Micron Technology	22.84%	17.21%	11.28%
IonQ	-885.21%	-67.11%	-57.89%

Analyst Recommendations

This is a summary of recent ratings for Micron Technology and IonQ, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Micron Technology	0	5	25	5	3.00
IonQ	2	5	7	0	2.36

Micron Technology presently has a consensus target price of $202.79, suggesting a potential downside of 12.99%. IonQ has a consensus target price of $58.33, suggesting a potential downside of 1.37%. Given IonQ’s higher probable upside, analysts clearly believe IonQ is more favorable than Micron Technology.

Volatility and Risk

Micron Technology has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500. Comparatively, IonQ has a beta of 2.59, meaning that its stock price is 159% more volatile than the S&P 500.

Summary

Micron Technology beats IonQ on 11 of the 15 factors compared between the two stocks.

About Micron Technology

Micron Technology, Inc. designs, develops, manufactures, and sells memory and storage products worldwide. The company operates through four segments: Compute and Networking Business Unit, Mobile Business Unit, Embedded Business Unit, and Storage Business Unit. It provides memory and storage technologies comprising dynamic random access memory semiconductor devices with low latency that provide high-speed data retrieval; non-volatile and re-writeable semiconductor storage devices; and non-volatile re-writable semiconductor memory devices that provide fast read speeds under the Micron and Crucial brands, as well as through private labels. The company offers memory products for the cloud server, enterprise, client, graphics, networking, industrial, and automotive markets, as well as for smartphone and other mobile-device markets; SSDs and component-level solutions for the enterprise and cloud, client, and consumer storage markets; discrete storage products in component and wafers; and memory and storage products for the automotive, industrial, and consumer markets. It markets its products through its direct sales force, independent sales representatives, distributors, and retailers; and web-based customer direct sales channel, as well as through channel and distribution partners. Micron Technology, Inc. was founded in 1978 and is headquartered in Boise, Idaho.

About IonQ

IonQ, Inc. engages in the development of general-purpose quantum computing systems in the United States. It sells access to quantum computers of various qubit capacities. The company makes access to its quantum computers through cloud platforms, such as Amazon Web Services (AWS) Amazon Braket, Microsoft’s Azure Quantum, and Google’s Cloud Marketplace, as well as through its cloud service. It also provides contracts associated with the design, development, and construction of specialized quantum computing hardware systems; maintenance and support services; and consulting services related to co-developing algorithms on quantum computing systems. The company was founded in 2015 and is headquartered in College Park, Maryland.