IonQ, Inc. (NYSE:IONQ) is a technology company that develops general-purpose quantum computing systems. Its website claims that “quantum computing has the potential to change the world.” Investors seem to be confused about this bold statement as they have witnessed a three-month return of nearly -51% for IONQ stock. However, IONQ stock also has a one-month return of 17.2%. Currently, the stock has losses of about 9.5% year-to-date at a time when many other tech stocks have seen a strong selloff amid rising interest rate worries and geopolitical concerns.

IonQ chose to go public in a way that received a ton of attention in 2021. It did it through merging with a special purpose acquisition company (SPAC).

IonQ states that it is the first publicly traded, pure-play quantum computing company. This is an important milestone, yet it must prove its worth soon. Other than being a marketing reference, IonQ focuses a lot on innovation. Having a vision to change the world will require results.

What are some of the factors that can bring these results? To start, they include a very important partnership with a leading automotive maker.

IonQ and Hyundai Motor

IonQ and Hyundai Motor Company (OTCMKTS:HYMTF) announced a partnership “to develop new variational quantum eigensolver (VQE) algorithms to study lithium compounds and their chemical reactions involved in battery chemistry.”

This is big news for both companies and can solve many of the problems current electric vehicles have. These include: limited range of autonomy, lengthy time for charging, and deterioration of the battery performance over time. It is like keeping a mobile phone for more than one year while using it extensively. Its battery performance will fall quickly. Imagine having invested a considerable amount of money in an electric vehicle. After a few years, you begin to need to charge it more often, as its battery will have lost its brand-new top performance.

For IonQ, a partnership with a well-known and reputable car maker like Hyundai adds bonuses to its brand name. It is also worth mentioning that IonQ is the first and only quantum hardware integrated with all major cloud platforms such as Microsoft Azure, Amazon Bracket, and Google Cloud. Adding partnerships with other companies in sectors that need technology is a very smart move.

Hyundai will also benefit from research and development in better-quality batteries. These batteries explore improvements for over-discharge cycles, durability, capacity, and safety. It is a win-win situation for both parties.

Quantum Computing Techniques

Since quantum computing is such a niche field, it really needs a scalability solution to be able to go mainstream. And IonQ is hoping to fill in this gap.

IonQ and Duke Quantum Center at Duke University have announced a new quantum gate that can help scale quantum algorithms and support a plethora of key quantum computing techniques. This advancement for quantum technology could become mainstream soon.

The Sad Story for IONQ Stock

In the third quarter (Q3) of 2021, IonQ reported revenue of $223,000, a net loss of $14.8 million, and plenty of cash and cash equivalents of $587 million. The financial outlook expected bookings of $600,000 to $800,000 for fourth-quarter 2021 and approximately $15.7 million, and $15.9 million for the full-year 2021.

What is even more worrisome to me is that the expected full-year 2021 revenue was estimated to be between $1.5 million and $1.7 million.

At the close of the U.S. stock market on Feb. 16, IonQ had a stock price of $15.82 and a market capitalization of $3.045 billion. Let’s do the math and calculate the price-to-sales (P/S) ratio on a trailing twelve month basis. Assuming that the estimate of IonQ proves to be correct, then the calculation is 1,791x.

This is simply too high.

As of Feb.17, the price-to-book (P/B) ratio is 5.28. This is another indication that the stock trades at a large premium now.

IonQ has a lot of business potential that is supported by its latest partnership. The stock, however, is not presenting any plausible arguments to favor it. The firm loses money and revenue is not very meaningful. This places IONQ stock in the category of simply monitoring for further catalysts, and the best one would be a sustainable revenue surge. The path to profitability will take more time and require tons of effort.

On the date of publication, Stavros Georgiadis, CFA  did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Stavros Georgiadis is a CFA charter holder, an Equity Research Analyst, and an Economist. He focuses on U.S. stocks and has his own stock market blog at thestockmarketontheinternet.com/. He has written in the past various articles for other publications and can be reached on Twitter and on LinkedIn.