Rigetti Computing Inc. (NASDAQ: RGTI), which reported a Q4 loss that was well over the analyst’s forecast, lost 10% more this morning.
The shares of quantum computing companies are down by close to 65 percent year-to-date.
They are not cheap to buy by any means.
Rigetti’s recent quarter loss was 68 cents, a significant difference from the analysts’ expectation of 8 cents.
The results of the disappointing auction suggest that purchasing RGTI at today’s low price may not be a good idea.
Rigetti Computing Stock is wildly overvalued
The quantum computing technology is a very exciting one with a large enough market.
Does it mean that every name in this space is going to perform better than the others over the short-to-medium term? Perhaps not!
RGTI’s market capitalization is now around $1.75billion after today’s sale. Comparatively, the company’s revenue for 2024 was only $11,000,000.
Rigetti Computing’s stock, therefore, is trading for more than 160x its 12-month trailing sales. This suggests that its valuation has detached itself from its fundamentals.
RGTI is overvalued despite the recent decline. Investors should be cautious when considering purchasing this quantum computing stock at a discount.
RGTI burns cash at an accelerated pace
Rigetti is not a good investment at the current price as it continues to lose cash rapidly.
After losing just a little over $68 million, the quantum computing company has now $217 millions in cash.
It’s also not likely to make a profit in the near future, so RGTI could dilute shareholders even more as it raises fresh capital over the next few months or years.
These factors indicate that Rigetti Computing is not a good investment for investors looking for solid financials or exciting growth potential.
Buy Rigetti stock after earnings dip?
The Nasdaq listed firm has teamed with Quanta Computer to accelerate the development of quantum computers in the last quarter of the year.
Quanta Collaboration is designed to enhance our market position. Subodh Kulkarni, the chief executive of the company said in today’s release that the complementary strengths we have will help us achieve our goal of being at the forefront in the quantum computing market.
RGTI has committed to achieving 100+ qubits before the end of year, while reducing error rates by two times.
It launched Ankaa-3 in December. This 84-qubits system has a median iSWAP Gate fidelity of 99%.
Rigetti Computing’s stock is still unattractive, despite the current sell-off, as it has a shrinking revenue, burns cash quickly, and may require new capital in order to continue operations.
The post Rigetti Computing Stock is Down 65%: Here’s Why I Don’t Buy may change as new information becomes available.
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