Amazon.com, Inc. (AMZN)vs IONQ Holdings, Inc. (IONQ)

Quick verdict

Amazon.com, Inc. (AMZN) and IONQ Holdings, Inc. (IONQ) appeal to different investors. On our six-factor framework, AMZN scores 3 and IONQ scores 3. IONQ looks cheaper on the multiples that matter, while AMZN grows faster and IONQ earns higher returns on capital. The two are evenly matched overall, so your priority — value, growth, income or safety — should decide it.

2-year relative performance

At-a-glance comparison

Business model and revenue mix

Amazon.com, Inc. operates in Specialty Retail (Consumer Cyclical), while IONQ Holdings, Inc. sits in Internet Content & Information (Communication Services). The two operate in different sectors, so cyclicality and end-market exposure differ — factor that into any portfolio overlap. AMZN carries a beta of 1.46 versus 1.75 for IONQ, meaning IONQ has historically been the more volatile of the two.

Valuation

On valuation, IONQ is the cheaper stock. AMZN trades on a forward P/E of 45.95 and EV/EBITDA of 12.07, against 15.88 and 15.3 for IONQ. Price-to-sales is 3.77 vs 1.79, and free-cash-flow yield is 2.0% vs 3.8%. A higher multiple is only justified if the company can sustain faster growth or wider margins, which is exactly what the next sections test.

Growth profile

AMZN is the faster grower. AMZN has compounded revenue at 12.4% over three years with EPS growth of 28.8%, while IONQ has delivered 6.0% revenue and 7.1% EPS growth. Growth like this is the single biggest driver of long-term returns, but it also tends to come with a richer valuation, so it must be weighed against the multiples above.

Profitability and quality

On profitability and quality, IONQ is stronger. AMZN posts a 12.1% operating margin, 30.5% return on equity and 8.5% return on invested capital. IONQ posts 42.7%, 47.4% and 26.6% respectively. Return on invested capital above roughly 15% is a hallmark of a durable competitive advantage, so this metric deserves particular attention.

Balance-sheet risk

AMZN has the safer balance sheet. AMZN carries net-debt/EBITDA of 0.86x with a current ratio of 1.03, versus 3.97x and 1.39 for IONQ. Lower leverage gives a company more room to invest through a downturn and reduces the risk of dilution or distress.

Price performance and shareholder returns

Over the past year AMZN returned 4.0% against -13.4% for IONQ; on a three-year annualised basis it is 42.8% vs -6.7%. AMZN yields 0.0% and IONQ yields 3.3%. Past performance never guarantees future results, but the multi-year track record shows how the market has rewarded each business so far.

Which stock fits which investor

For value-oriented investors, IONQ is the better fit on today's multiples. Growth investors will likely prefer AMZN, which is expanding faster. Income investors should lean toward IONQ for its higher shareholder yield, while investors who prize quality-at-a-reasonable-price will favour IONQ for its superior returns on capital. This is a comparison of facts, not a recommendation — your time horizon, risk tolerance and existing holdings should drive the final decision.

• Value: IONQ
• Growth: AMZN
• Income: IONQ
• Quality: IONQ

Frequently asked questions

Is AMZN or IONQ the better buy right now?

Neither is universally "better." AMZN scores 3 and IONQ scores 3 on our six-factor framework. IONQ is cheaper, AMZN grows faster, and IONQ is higher quality — so the right pick depends on your objective.

Which stock is cheaper, AMZN or IONQ?

IONQ is the cheaper stock across forward P/E (45.95 vs 15.88), EV/EBITDA (12.07 vs 15.3) and price-to-sales (3.77 vs 1.79).

Which has grown faster, AMZN or IONQ?

AMZN has the stronger growth profile, with three-year revenue CAGR of 12.4% for AMZN versus 6.0% for IONQ.

Which stock pays a bigger dividend?

AMZN yields 0.0% and IONQ yields 3.3%, so IONQ is the stronger income choice.

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