IonQ's (IONQ) deal to acquire Elisity is a "sensible" channel play and extension of its security assets, Wedbush Securities analysts said in a Monday note.

IonQ said Monday it signed an agreement to acquire cybersecurity firm Elisity in an all-stock deal worth up to $1.3 billion.

"We understand the need for becoming quantum-ready in cybersecurity, but we're more or less neutral as it is our view that cybersecurity applications in quantum are amongst the furthest away from commercial relevance," analysts said.

Wedbush said that the all-stock nature of the deal suits IonQ's cash needs.

The company did not disclose the size of the share issuance for the acquisition, but Wedbush estimates about 23 million to 35 million new IonQ shares.

Wedbush maintained an outperform rating and a $75 price target on the stock.

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