Xerox (NASDAQ:XRX) versus IonQ (NYSE:IONQ) Critical Comparison

Xerox (NASDAQ:XRX) and IonQ (NYSE:IONQ) are both technology companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Volatility & Risk

Xerox has a beta of 2.4, suggesting that its stock price is 140% more volatile than the S&P 500. Comparatively, IonQ has a beta of 3.28, suggesting that its stock price is 228% more volatile than the S&P 500.

Institutional and Insider Ownership

85.4% of Xerox shares are owned by institutional investors. Comparatively, 41.4% of IonQ shares are owned by institutional investors. 1.5% of Xerox shares are owned by company insiders. Comparatively, 0.6% of IonQ shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Xerox and IonQ”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Xerox	$7.02 billion	0.06	-$1.03 billion	($7.38)	-0.40
IonQ	$130.02 million	129.29	-$510.38 million	($4.66)	-9.47

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Xerox	-11.93%	17.61%	0.65%
IonQ	-553.27%	-22.29%	-13.20%

Analyst Recommendations

This is a breakdown of current ratings for Xerox and IonQ, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Xerox	1	2	1	0	2.00
IonQ	1	4	9	0	2.57

Xerox presently has a consensus target price of $4.48, indicating a potential upside of 50.95%. IonQ has a consensus target price of $69.92, indicating a potential upside of 58.47%. Given IonQ’s stronger consensus rating and higher probable upside, analysts plainly believe IonQ is more favorable than Xerox.

About Xerox

Xerox Holdings Corporation, together with its subsidiaries, operates as a workplace technology company that integrates hardware, services, and software for enterprises in the Americas, Europe, the Middle East, Africa, India, and internationally. The company operates through two segments, Print and Other; and FITTLE. The Print and Other segment designs, develops, and sells document systems, solutions, and services; and IT and software products and services. The FITTLE segment offers financing solutions for direct channel customer purchases; and lease financing to end-users. It also offers workplace solutions comprising desktop monochrome, color, and multifunction printers, and ConnectKey software; digital printing presses and light production devices; and digital services that support workflow automation, personalization and communication software, content management solutions, and digitization services. In addition, the company provides graphic communications, in-plant, and production solutions; FreeFlow, a software solutions for the automation and integration of processing of print job comprising file preparation, final production, and electronic publishing; and IT services, end user computing devices, network infrastructure, and communications technology, as well as technology product support, professional engineering, and commercial robotic process automation. Further, it sells paper products and standalone software, such as CareAR, DocuShare, and XMPie; and invests in startups. The company sells its products through its direct sales force, distributors, independent agents, dealers, value-added resellers, systems integrators, and e-commerce marketplaces. The company was formerly known as Xerox Corporation and changed its name to Xerox Holdings Corporation in August 2019. Xerox Holdings Corporation was founded in 1903 and is headquartered in Norwalk, Connecticut.

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.