Shares of IonQ (IONQ 2.28%) have gained 184% over the last year. The stock trades at an eye-watering 119 times sales; I can't talk about profit-based valuation ratios because the quantum computing specialist isn't profitable.

So it's fair to ask if it might already be too late to buy IonQ stock. I would argue that it's way too early, actually. Let me explain what I mean.

IonQ's soaring valuation

In the context of IonQ's recent stock surge, a closer look reveals a valuation that might be more of a mirage than a miracle.

Trading at 119 times trailing sales, IonQ's valuation looks like a speculative bubble. This is particularly striking in the quantum computing sector, which is still in its early days as a serious business. Yes, IonQ has started to collect some revenues but each step forward on the top line has been accompanied by an even sharper uptick in expenses.

As a result, IonQ burns more and more cash over time. Management keeps the lights on largely by dipping into the cash reserves IonQ collected in its SPAC-style initial public offering three years ago. At this accelerating rate of quarterly cash burn, those coffers could be empty in two or three years.

What's more, IonQ's valuation surge seems to ignore the competitive landscape, where numerous other players are vying for dominance. Sure, some of the company's rivals are also small, underfunded, and hungry little start-ups. But others are deep-pocketed household names such as IBM (IBM 0.71%) and Honeywell (HON -1.30%). You can't walk into the same room as these world-class innovators and expect to win every contract.

Don't overlook the competitive landscape

Quantum computing is a promising technology with the potential to disrupt computing as we know it. IonQ is a leading researcher in the field, bravely attempting to commercialize its research projects in this early stage. I'm duly impressed by the company's actual system sales, including an order for two quantum computers from the U.S. Air Force. If it's good enough for military use, IonQ's quantum solutions have to be the real deal.

However, the company is nowhere near actually delivering these ordered systems to contracted customers yet. Management talks about an 18-month delivery process, which starts with actually building the thing. The Air Force and others are buying experimental system designs, and Silicon Valley is littered with the bankrupted remains of fast-growing upstarts that ran into manufacturing issues or research snags on the road to useful products.

I don't know for sure that IonQ will join that unfortunate group -- but I'm not sure that it won't, either. That's a deal-breaking level of uncertainty for me.

"Too late" to buy IonQ stock? More like "too early"

IonQ's inflated valuation, lacking support from concrete results or robust long-term contracts, suggests that investors might be jumping the gun, banking heavily on unproven potential. I guess that's alright as long as you keep your IonQ investment small. That modest investment might multiply many times over if IonQ delivers on its quantum computing promises while dodging challenges from much larger competitors, or it could go to absolute zero for a thousand different reasons.

I don't recommend making that bet unless you're prepared to lose the entire investment over time. IonQ should continue its technology development and contract-signing for a couple more years before I can take it seriously as an investment idea. In other words, I think it's too early to invest in IonQ today.