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Rigetti Computing Inc. (RGTI)
:RGTI
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Rigetti Computing
(NASDAQ:RGTI)
Rating:50Neutral
Price Target:
$12.00
▲(6.38%Upside)
Positive Factors
Financial Performance
The balance sheet was significantly strengthened with approximately $217 million in cash, providing financial stability and runway for future developments.
Strategic Partnerships
The partnership with Quanta is a significant validation of Rigetti's approach, as Quanta's extensive evaluation concluded that superconducting gate-based systems are the optimal technology.
Technological Advancements
Rigetti's collaboration with NVIDIA and Quantum Machines successfully implemented AI to automate the calibration of its 9-qubit chip, showcasing improvements in scaling quantum computing systems.
Negative Factors
Competitive Challenges
IBM has expressed an interest in adopting the chiplet approach but will likely face challenges navigating RGTI’s rich patent portfolio surrounding the chiplet architecture.
Revenue Dependence
Near-term revenues are expected to come mainly from recent Department of Defense awards and limited Department of Energy funding, providing some immediate financial inflow.
Rigetti Computing (RGTI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.30B
Dividend YieldN/A
Average Volume (3M)55.63M
Price to Earnings (P/E)―
Beta (1Y)2.12
Revenue Growth-28.38%
EPS Growth-29.15%
CountryUS
Employees137
SectorTechnology
Sector Strength83
IndustryComputer Hardware
Share Statistics
EPS (TTM)-0.08
Shares Outstanding292,442,750
10 Day Avg. Volume40,744,298
30 Day Avg. Volume55,634,803
Financial Highlights & Ratios
PEG Ratio-0.78
Price to Book (P/B)15.50
Price to Sales (P/S)0.00
P/FCF Ratio-55.64
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue73.47
Enterprise Value/Gross Profit704.89
Enterprise Value/Ebitda-6.66
Forecast
1Y Price Target
$15.00Price Target Upside32.98% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Rigetti Computing Business Overview & Revenue Model
Company DescriptionRigetti Computing, Inc. operates as an integrated systems company. The company builds quantum computers and the superconducting quantum processors that power them. Its machines are integrated into various public, private, or hybrid clouds through its Quantum Cloud Services platform. The company was founded in 2013 and is based in Berkeley, California.
How the Company Makes MoneyRigetti Computing primarily generates revenue through its Quantum Cloud Services platform, which allows customers to access its quantum processors on a pay-per-use or subscription basis. This platform serves as a key revenue stream by providing cloud-based quantum computing resources to businesses, researchers, and developers. Additionally, Rigetti engages in partnerships and collaborations with academic institutions, government agencies, and private enterprises, which can lead to funded research projects and joint ventures, contributing to its revenue. The company may also receive grants or contracts from governmental bodies for advancing quantum computing technologies. Rigetti's earnings are significantly influenced by its ability to continuously innovate and improve its quantum computing capabilities, maintaining a competitive edge in this rapidly evolving sector.
Rigetti Computing Key Performance Indicators (KPIs)
Any
Remaining Performance Obligations
Indicates the value of contracted work yet to be completed, providing insight into future revenue streams and the company's ability to deliver on existing commitments.
Indicates the value of contracted work yet to be completed, providing insight into future revenue streams and the company's ability to deliver on existing commitments.
Data provided by:
Main Street Data
Main Street DataRigetti Computing Earnings Call Summary
Earnings Call Date:May 12, 2025
(Q1-2025)
| % Change Since: -2.34%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
Rigetti's earnings call highlighted significant strategic achievements, including participation in prestigious government projects and securing major investments, which suggest strong future potential. However, these are tempered by immediate financial challenges such as declining revenue, lower gross margins, and increased operating expenses, alongside dependency on government funding. Despite these challenges, the strategic developments and partnerships position Rigetti positively for future growth.Q1-2025 Updates
Positive Updates
Participation in DARPA's Quantum Benchmarking Initiative
Rigetti has been selected to participate in DARPA's Quantum Benchmarking Initiative, advancing to Stage A. The project is focused on developing a utility-scale quantum computer using proprietary multi-chip architecture with scalable quantum error correction codes.
Strategic Collaboration with Quanta Computer
Rigetti closed a $35 million investment from Quanta Computer, strengthening their strategic collaboration. Quanta will invest $250 million over five years in the non-QPU hardware portion of the stack.
AFOSR Award for Chip Fabrication Technology
Rigetti leads a $5.48 million consortium to further develop Alternating-Bias Assisted Annealing (ABAA) technology, collaborating with several prestigious institutions to improve chip fabrication.
Innovate UK Quantum Mission Pilot Awards
Rigetti received three Innovate UK Quantum Mission Pilot Awards to advance superconducting quantum computing, focusing on quantum error correction capabilities and upgrading their existing quantum computer.
Publication in Nature Physics
A joint paper with Harvard, MIT, and the University of Chicago on superconducting qubit control using light was published in Nature Physics, showcasing a promising approach to scaling qubit count systems.
Quantum Optimization Algorithm Success
Using Rigetti's 84-qubit Ankaa-3 system, Rigetti's quantum optimization algorithm achieved relative advantage against classical baselines on a power energy grid problem, highlighting potential quantum utility.
Negative Updates
Decline in Revenue and Gross Margin
First quarter 2025 revenues were $1.5 million, down from $3.1 million in the first quarter of 2024. Gross margins decreased to 30% from 49% year-over-year.
Increased Operating Expenses
Total operating expenses in Q1 2025 were $22.1 million, up from $18.1 million in the same period of 2024, due to salary increases, new hires, and higher stock compensation expenses.
Operating Loss
Rigetti reported an operating loss of $21.6 million for Q1 2025, compared to a $16.6 million loss in the prior year period.
Dependency on Government Funding
Sales are highly dependent on government contracts and funding, with delays in the NQI Reauthorization Act affecting potential revenue from academic institutions.
Company Guidance
During the Rigetti Computing First Quarter 2025 Financial Results Conference Call, CEO Subodh Kulkarni discussed several strategic initiatives and partnerships that are expected to drive the company's future growth. Rigetti has been selected for DARPA's Quantum Benchmarking Initiative, where it will advance to Stage A with a focus on developing a utility-scale quantum computer, combining its proprietary multi-chip architecture with scalable quantum error correction codes. This initiative is part of a broader effort to achieve utility-scale quantum computing, requiring over 10,000 physical qubits and high fidelity rates. Additionally, Rigetti has been awarded a $5.48 million AFOSR Award to develop its Alternating-Bias Assisted Annealing technology, which aims to improve chip fabrication. The firm also received three Innovate UK Quantum Mission Pilot Awards, with plans to upgrade its quantum computer at the National Quantum Computing Center to a 36-qubit system, enhancing error correction capabilities. Financially, Rigetti reported Q1 2025 revenues of $1.5 million, a decrease from $3.1 million the previous year, with gross margins falling from 49% to 30%, and an operating loss of $21.6 million. However, the company recorded a net income of $42.6 million, driven by favorable non-cash changes in derivative warrant and earn-out liabilities. Cash and equivalents stood at $237.7 million as of April 30, 2025. The call also highlighted a strategic investment by Quanta Computer, with Quanta purchasing $35 million worth of Rigetti common stock, further solidifying their collaboration.Rigetti Computing Financial Statement Overview
Summary
Rigetti Computing faces financial strain with declining revenues, significant losses, and cash flow management issues. Despite a strong equity base, profitability and operational efficiency are lacking, as indicated by negative net profit margins and cash flow challenges.Income Statement
Rigetti Computing shows declining revenue with a negative revenue growth rate over the last two years. The company experiences substantial negative net profit margins and EBIT margins, indicating significant losses. Despite a high gross profit margin, overall profitability remains challenged due to high operational costs.35
Negative
Balance Sheet
The company has a high equity ratio, indicating a solid equity base relative to its assets. However, the debt-to-equity ratio is low due to the negative equity in earlier years, leading to a misleadingly low leverage indication. The return on equity is negative, showing inefficiency in generating profits from shareholders' equity.40
Negative
Cash Flow
Rigetti Computing faces challenges with negative free cash flow and operating cash flow, indicating cash management issues. The negative free cash flow growth rate highlights difficulties in converting revenue into cash, while financing activities remain high to support operations.30
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Mar 2021 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 9.21M | 10.79M | 12.01M | 13.10M | 8.20M | 5.54M | Gross Profit |
| 4.64M | 5.70M | 9.21M | 10.23M | 1.92M | 4.05M | EBIT |
| -73.56M | -68.51M | -72.30M | -103.70M | -34.13M | -35.09M | EBITDA |
| -194.58M | -190.83M | -61.90M | -58.68M | -31.13M | -35.09M | Net Income Common Stockholders |
| -137.60M | -200.99M | -75.11M | -36.49M | -38.24M | -17.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 206.63M | 192.09M | 99.93M | 142.81M | 11.73M | 22.20M | Total Assets |
| 245.90M | 284.79M | 159.91M | 203.44M | 46.43M | 49.68M | Total Debt |
| 30.04M | 8.80M | 30.57M | 39.14M | 24.79M | 0.00 | Net Debt |
| -176.58M | -58.87M | 9.17M | -18.75M | 13.06M | -22.20M | Total Liabilities |
| 80.47M | 158.20M | 50.33M | 53.22M | 117.96M | 85.11M | Stockholders Equity |
| 165.43M | 126.59M | 109.59M | 150.22M | -71.53M | -35.43M |
| Cash Flow | Free Cash Flow | ||||
| -59.29M | -61.73M | -59.64M | -85.43M | -36.30M | -34.47M | Operating Cash Flow |
| -51.14M | -50.63M | -50.58M | -62.69M | -29.29M | -30.07M | Investing Cash Flow |
| -108.19M | -78.36M | 773.00K | -107.02M | -7.01M | -4.40M | Financing Cash Flow |
| 161.68M | 175.46M | 13.23M | 215.45M | 25.83M | 56.29M |
Rigetti Computing Technical Analysis
Neutral
11.28
Price Trends
10.13
Positive
10.45
Positive
7.05
Positive
Market Momentum
0.45
Positive
48.63
Neutral
12.17
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGTI, the sentiment is Neutral. The current price of 11.28 is below the 20-day moving average (MA) of 12.09, above the 50-day MA of 10.13, and above the 200-day MA of 7.05, indicating a neutral trend. The MACD of 0.45 indicates Positive momentum. The RSI at 48.63 is Neutral, neither overbought nor oversold. The STOCH value of 12.17 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RGTI.
Rigetti Computing Risk Analysis
Rigetti Computing disclosed 70 risk factors in its most recent earnings report. Rigetti Computing reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
We are in our early stages and have a limited operating history, which makes it difficult to forecast the future results of our operations. We have in the past failed to meet publicly announced milestones and may fail to meet projected technological milestones in the future. In addition, we have in the past changed our technology roadmap, including the anticipated milestones and timing thereof. Q4, 2024
2.
We have and may in the future enter into collaboration agreements and similar arrangements with third parties for the manufacturing of our products, and these agreements and similar arrangements may never achieve their anticipated goals, which may have a materially adverse impact on our business operations and our financial position or results of operations. Q4, 2024
3.
Information available in public media that is published by third parties, including blogs, articles, message boards and social and other media may include statements not attributable to the Company and may not be reliable or accurate. Q4, 2024
Rigetti Computing Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $11.81B | 10.34 | -7.44% | 2.91% | 7.41% | -7.93% | |
60 Neutral | $1.93B | ― | -30.47% | ― | 45.57% | -35.70% | |
59 Neutral | $5.78B | ― | -154.89% | ― | 121.61% | -13.50% | |
58 Neutral | $9.67B | ― | -52.11% | ― | 69.92% | -79.18% | |
50 Neutral | $3.30B | ― | -85.28% | ― | -28.38% | -29.15% |
* Technology Sector Average
Performance Comparison
RGTI
Rigetti Computing
11.28
10.25
995.15%
QUBT
Quantum Computing
13.70
13.07
2074.60%
IONQ
IonQ
39.02
30.80
374.70%
QBTS
D-Wave Quantum
18.62
17.42
1451.67%
Rigetti Computing Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Rigetti Computing Announces New Stock Sale Agreement
Neutral
May 30, 2025
On May 29, 2025, Rigetti Computing entered into an Open Market Sale Agreement with Jefferies LLC for an ‘at-the-market’ offering program, allowing the company to issue and sell shares of its common stock up to $350 million. This agreement provides Rigetti with flexibility in raising capital, potentially impacting its financial strategy and market positioning.
The most recent analyst rating on (RGTI) stock is a Buy with a $2.00 price target. To see the full list of analyst forecasts on Rigetti Computing stock, see the RGTI Stock Forecast page.
Executive/Board Changes
Rigetti Computing Announces Board of Directors Changes
Neutral
Mar 28, 2025
Rigetti Computing announced that Cathy McCarthy will not seek re-election as a Class III director at the company’s 2025 Annual Meeting of Stockholders. To maintain balance among board classes, Ray O. Johnson, currently a Class I director, has been nominated to stand for election as a Class III director, with his resignation from Class I contingent upon his election.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.