Rigetti Computing (NASDAQ:RGTI) Trading Down 3.1% - Here's Why

Key Points

• Rigetti shares fell 3.1% to about $16, with roughly 27.1 million shares traded. The decline came amid concerns about valuation, insider selling, cash burn and technical hurdles facing its 108-qubit system.
• Quantum-sector sentiment has benefited from IonQ’s reported error-correction breakthrough, while Rigetti retains potential support from more than $500 million in cash and investments, partnerships with Amazon and Microsoft, and government funding.
• Analyst views remain mixed: seven rate the stock Buy, four Hold and two Sell, producing an overall Hold rating and a consensus price target of $30.67. Rigetti remains heavily unprofitable, reporting $5.14 million in quarterly revenue and a negative net margin exceeding 2,189%.

Rigetti Computing, Inc. (NASDAQ:RGTI - Get Free Report) fell 3.1% during mid-day trading on Wednesday . The stock traded as low as $15.97 and last traded at $16.00. Approximately 27,108,959 shares changed hands during mid-day trading, a decline of 11% from the average daily volume of 30,463,807 shares. The stock had previously closed at $16.52.

More Rigetti Computing News

Here are the key news stories impacting Rigetti Computing this week:

• Positive Sentiment: Quantum stocks initially benefited from IonQ’s reported error-decoder breakthrough and plans involving its Superion 256 system. The news lifted sentiment across the sector, including Rigetti, and highlighted continued investor interest in advances that could improve quantum-computing performance. IonQ Surges 11% as NVIDIA Research Center Deal Follows Error-Decoder Breakthrough; D-Wave Climbs 5%, Rigetti Rises 4%
• Positive Sentiment: Rigetti has more than $500 million in cash and investments and has attracted support from major technology companies including Amazon and Microsoft. Government funding and continued development of its 108-qubit Cepheus system could provide resources for future growth, although funding is tied to milestones and performance requirements. 3 Reasons Rigetti Computing Stock Could Be a Trap, Not a Bargain
• Neutral Sentiment: Analysts and commentators continue to compare Rigetti with IonQ and AI-chip company Cerebras Systems. Cerebras is described as generating substantially higher revenue and operating profitably, while Rigetti represents a higher-risk, early-stage quantum opportunity. Cerebras Systems vs. Rigetti Computing
• Negative Sentiment: Rigetti’s valuation is under scrutiny after its substantial multiyear share-price gain. Reports suggest the stock appears fully valued relative to book value, reducing the margin of safety for investors if quantum adoption takes longer than expected. Rigetti Computing Stock Looks Fully Valued Next To Its Book Value
• Negative Sentiment: Insider selling across leading pure-play quantum companies, totaling roughly $895 million in reported sales, is raising concerns that executives view current valuations as attractive. Rigetti also continues to burn cash, while government funding may involve dilution and additional execution conditions. $895 Million Insider-Selling Warning
• Negative Sentiment: Rigetti’s 108-qubit development faces a coherence-time bottleneck that must be addressed to improve gate fidelity and reliability. This underscores the technical and scaling challenges that could delay commercialization. RGTI’s 108-Qubit Performance Hurdle

Analyst Upgrades and Downgrades

A number of brokerages have issued reports on RGTI. Rosenblatt Securities reaffirmed a "buy" rating and issued a $40.00 price objective on shares of Rigetti Computing in a research note on Friday, August 7th. Zacks Research cut shares of Rigetti Computing from a "hold" rating to a "strong sell" rating in a research report on Wednesday, August 19th. Wall Street Zen downgraded shares of Rigetti Computing from a "hold" rating to a "sell" rating in a research report on Saturday, August 8th. Weiss Ratings downgraded Rigetti Computing from a "sell (d-)" rating to a "sell (e+)" rating in a research note on Thursday, September 17th. Finally, Benchmark assumed coverage on shares of Rigetti Computing in a research note on Monday, July 27th. They issued a "buy" rating and a $25.00 price target on the stock. Seven equities research analysts have rated the stock with a Buy rating, four have issued a Hold rating and two have assigned a Sell rating to the stock. According to MarketBeat, Rigetti Computing currently has an average rating of "Hold" and a consensus target price of $30.67.

Rigetti Computing Trading Down 3.1%

The company has a market cap of $5.34 billion, a P/E ratio of -17.78 and a beta of 2.00. The business has a 50 day moving average price of $15.96 and a 200-day moving average price of $17.55.

Rigetti Computing (NASDAQ:RGTI - Get Free Report) last announced its quarterly earnings data on Thursday, August 6th. The company reported ($0.05) EPS for the quarter, meeting analysts' consensus estimates of ($0.05). The company had revenue of $5.14 million during the quarter, compared to the consensus estimate of $5.09 million. Rigetti Computing had a negative net margin of 2,189.54% and a negative return on equity of 17.50%. On average, sell-side analysts expect that Rigetti Computing, Inc. will post -0.27 earnings per share for the current year.

Insider Activity at Rigetti Computing

In other Rigetti Computing news, CFO Jeffrey Bertelsen sold 25,000 shares of the company's stock in a transaction on Thursday, September 3rd. The shares were sold at an average price of $15.00, for a total value of $375,000.00. Following the transaction, the chief financial officer directly owned 168,067 shares in the company, valued at $2,521,005. The trade was a 12.95% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available at this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, CTO Andrew Bestwick sold 5,791 shares of the company's stock in a transaction dated Thursday, August 20th. The shares were sold at an average price of $16.81, for a total transaction of $97,346.71. Following the completion of the transaction, the chief technology officer owned 1,036,121 shares in the company, valued at approximately $17,417,194.01. This trade represents a 0.56% decrease in their position. The disclosure for this sale is available in the SEC filing. The sale was made to cover tax withholding obligations related to the vesting of equity awards. In the last three months, insiders sold 163,689 shares of company stock valued at $2,570,890. 1.60% of the stock is owned by company insiders.

Institutional Investors Weigh In On Rigetti Computing

A number of hedge funds and other institutional investors have recently made changes to their positions in the business. Larson Financial Group LLC boosted its position in shares of Rigetti Computing by 138.4% during the 4th quarter. Larson Financial Group LLC now owns 1,218 shares of the company's stock worth $27,000 after acquiring an additional 707 shares in the last quarter. Compass Financial Management LLC acquired a new position in Rigetti Computing during the second quarter valued at approximately $34,000. PeakShares LLC bought a new stake in Rigetti Computing during the first quarter worth $28,000. Clearstead Advisors LLC lifted its stake in Rigetti Computing by 181.6% during the fourth quarter. Clearstead Advisors LLC now owns 3,267 shares of the company's stock worth $72,000 after purchasing an additional 2,107 shares during the last quarter. Finally, EverSource Wealth Advisors LLC boosted its holdings in shares of Rigetti Computing by 41.9% in the 4th quarter. EverSource Wealth Advisors LLC now owns 3,530 shares of the company's stock valued at $78,000 after purchasing an additional 1,043 shares in the last quarter. 35.38% of the stock is currently owned by institutional investors and hedge funds.

Rigetti Computing Company Profile

Rigetti Computing, Inc is a quantum computing company that develops full-stack quantum computing systems based on superconducting qubit technology. The company designs and manufactures quantum processors, develops the software needed to program and operate them, and provides access to its systems through cloud-based services.

Rigetti's offerings include its quantum processing units and integrated quantum computing systems, as well as the Rigetti Quantum Cloud Services platform. Through cloud access and partnerships, organizations can experiment with quantum algorithms and explore potential applications in areas such as optimization, simulation, machine learning and other computationally intensive fields.

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