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Rigetti Computing Inc. (RGTI)
:RGTI
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Rigetti Computing
(NASDAQ:RGTI)57Neutral
Positive Factors
Financial Performance
The balance sheet was significantly strengthened at year-end through several capital raises with approximately $220 million in cash.
Technological Advancements
Significant progress in qubit fidelity has been achieved, reaching 99.5% from the mid-90s in just two years, with a path to further reduce error rates to 99.7% near-term.
Negative Factors
Funding Challenges
Funding from various US government agencies remains RGTI's primary source of revenues, and the recent elections have delayed the passage of additional funding for the National Quantum Initiative.
Rigetti Computing (RGTI) vs. S&P 500 (SPY)
Market Cap
$1.87B
Dividend YieldN/A
Average Volume (3M)100.20M
Price to Earnings (P/E)―
Beta (1Y)3.03
Revenue Growth-19.06%
EPS Growth43.94%
CountryUS
Employees134
SectorTechnology
Sector Strength48
IndustryHardware & Equipment
Share Statistics
EPS (TTM)-0.38
Shares Outstanding242,295,800
10 Day Avg. Volume65,655,499
30 Day Avg. Volume100,200,467
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)124.51
Price to Cash Flow (P/CF)-24.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.25Price Target Upside94.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Rigetti Computing Business Overview & Revenue Model
Company DescriptionRigetti Computing (RGTI) is a quantum computing company that develops both hardware and software to advance quantum technologies. Headquartered in Berkeley, California, Rigetti designs quantum integrated circuits (ICs) and provides cloud-based quantum computing services through its platform, Forest, which allows users to run quantum algorithms and simulations. The company uses quantum computing to drive innovation in fields such as artificial intelligence, cryptography, and materials science.
How the Company Makes MoneyRigetti Computing generates revenue primarily through the sale of quantum computing systems and services. The company offers access to its quantum computing infrastructure via a cloud-based platform, allowing clients to run quantum algorithms and applications on Rigetti's quantum processors. Revenue streams include subscription fees for using the cloud platform, professional services for custom quantum solutions, and partnerships or collaborations with enterprises and research institutions seeking to explore the potential of quantum computing. Additionally, Rigetti may engage in strategic partnerships or collaborations that provide funding or revenue-sharing opportunities to support the development and scaling of its technology.
Rigetti Computing Financial Statement Overview
Summary
Rigetti Computing's financials indicate a company struggling with profitability and cash flow generation. Despite a stable balance sheet with low leverage, persistent negative profit margins and declining revenue pose significant risks. The company needs to address operational inefficiencies and enhance revenue generation to improve its financial standing.Income Statement
Rigetti Computing has faced challenges with consistently declining revenue, with a revenue decrease of 1% in TTM (Trailing-Twelve-Months) compared to the previous year. The gross profit margin decreased significantly, and net profit margins remain negative, indicating ongoing profitability issues. The company also recorded negative EBIT and EBITDA margins, reflecting operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet shows a moderate debt-to-equity ratio, as total debt is relatively low compared to stockholders' equity, indicating manageable leverage. However, the equity ratio is high, demonstrating reliance on equity financing. The return on equity is negative, stressing low profitability. Overall, the balance sheet reflects stability but with profitability challenges.55
Neutral
Cash Flow
Operating cash flow remains negative, indicating cash usage in operations. Free cash flow has declined, but the operating cash flow to net income ratio suggests better cash flow management relative to net income. The company faces challenges in generating positive cash flows, which could affect future investment and financing activities.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.24M | 12.01M | 13.10M | 8.20M | 5.54M | 735.48K | Gross Profit |
| 2.95M | 9.21M | 10.23M | 1.92M | 4.05M | 447.32K | EBIT |
| -50.01M | -72.30M | -103.70M | -34.13M | -35.09M | -47.70M | EBITDA |
| -25.24M | -61.90M | -58.68M | -31.13M | -35.09M | -43.76M | Net Income Common Stockholders |
| -16.71M | -75.11M | -36.49M | -38.24M | -17.21M | -54.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 99.93M | 99.93M | 142.81M | 11.73M | 22.20M | 308.71K | Total Assets |
| 159.91M | 159.91M | 203.44M | 46.43M | 49.68M | 27.49M | Total Debt |
| 30.57M | 30.57M | 39.14M | 24.79M | 0.00 | 26.89M | Net Debt |
| 9.17M | 9.17M | -18.75M | 13.06M | -22.20M | 26.58M | Total Liabilities |
| 50.33M | 50.33M | 53.22M | 117.96M | 85.11M | 155.90M | Stockholders Equity |
| 109.59M | 109.59M | 150.22M | -71.53M | -35.43M | -128.41M |
| Cash Flow | Free Cash Flow | ||||
| -41.99M | -59.64M | -85.43M | -36.30M | -34.47M | -39.98M | Operating Cash Flow |
| -31.35M | -50.58M | -62.69M | -29.29M | -30.07M | -36.89M | Investing Cash Flow |
| -10.64M | 773.00K | -107.02M | -7.01M | -4.40M | -2.94M | Financing Cash Flow |
| 217.77M | 13.23M | 215.45M | 25.83M | 56.29M | 18.74M |
Rigetti Computing Technical Analysis
Negative
7.86
Price Trends
12.13
Negative
7.27
Positive
4.11
Positive
Market Momentum
-1.05
Positive
36.72
Neutral
11.51
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RGTI, the sentiment is Negative. The current price of 7.86 is below the 20-day moving average (MA) of 10.86, below the 50-day MA of 12.13, and above the 200-day MA of 4.11, indicating a neutral trend. The MACD of -1.05 indicates Positive momentum. The RSI at 36.72 is Neutral, neither overbought nor oversold. The STOCH value of 11.51 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RGTI.
Rigetti Computing Risk Analysis
Rigetti Computing disclosed 74 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 0 New Risks
Rigetti Computing Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.83T | 39.48 | 91.87% | 0.03% | 114.20% | 146.26% | |
73 Outperform | $161.82B | 97.92 | 2.85% | ― | 13.69% | 91.75% | |
67 Neutral | $234.79B | 39.40 | 22.06% | 2.65% | 1.45% | -20.56% | |
59 Neutral | $22.39B | 11.53 | -18.05% | 2.31% | 5.00% | -25.89% | |
57 Neutral | $1.87B | ― | -49.33% | ― | -19.06% | 43.94% | |
44 Neutral | $721.54M | ― | -31.13% | ― | 35.65% | 57.52% | |
43 Neutral | $5.48B | ― | -86.40% | ― | 95.41% | -97.85% |
* Technology Sector Average
Performance Comparison
RGTI
Rigetti Computing
7.86
6.29
400.64%
AMD
Advanced Micro Devices
100.75
-104.38
-50.88%
IBM
International Business Machines
253.21
67.51
36.35%
NVDA
Nvidia
115.99
30.05
34.97%
QUBT
Quantum Computing
5.26
4.43
533.73%
IONQ
IonQ
22.35
12.98
138.53%
Rigetti Computing Earnings Call Summary
Earnings Call Date: Nov 12, 2024 | % Change Since: 417.11% | Next Earnings Date: Mar 5, 2025
Earnings Call Sentiment Neutral
The call highlighted significant technological advancements and collaborations, especially in modular architecture and quantum error correction, while also addressing challenges such as declining revenue and gross margins, and delays in government funding initiatives.Highlights
Introduction of New Modular System Architecture
Rigetti plans to release a 36-qubit system by mid-2025 and a system with over 100 qubits by the end of 2025, showcasing significant advancements in modular system architecture.
Tiling Technology Demonstration
Successfully demonstrated tiling of 9-qubit chips without performance deterioration, positioning Rigetti as a leader in multichip QPUs architecture.
Quantum Error Correction Progress
Collaborated with Riverlane to integrate quantum error correction technology, achieving real-time low-latency quantum error correction on the 84-qubit Ankaa-2 system.
International Collaborations
A Novera QPU has been co-located at the Israeli Quantum Computing Center and the 24-qubit Ankaa-class system was installed at the UK’s National Quantum Computing Center.
Net Loss Reduction
Net loss for Q3 2024 was $14.8 million, a significant reduction from $22.2 million in Q3 2023, aided by favorable changes in derivative warrant and earn-out liabilities.
Lowlights
Revenue and Gross Margin Decline
Q3 2024 revenue was $2.4 million, down from $3.1 million in Q3 2023. Gross margins also fell from 73% to 51%, attributed to variability in contract deliverables.
Challenges with NQI Reauthorization
The delay in the reauthorization of the National Quantum Initiative Act has impacted financials, with expectations of continued challenges until the act is signed.
Lower Margin Profile for NQCC Contract
The contract to deliver a 24-qubit quantum system had a lower gross margin profile, impacting overall profitability.
Company Guidance
During Rigetti's Q3 2024 earnings call, CEO Subodh Kulkarni outlined significant progress in the company's quantum computing road map, including plans to introduce a 36-qubit system by mid-2025 and a 100-qubit system by the end of 2025, both targeting a 99.5% median 2-qubit gate fidelity. The company remains on track to develop its 84-qubit Ankaa-3 system with a similar fidelity by the end of 2024. CFO Jeffrey Bertelsen reported third-quarter revenues of $2.4 million, a decrease from $3.1 million the previous year, and a gross margin of 51%, down from 73% in Q3 2023. Operating expenses for the quarter were $18.6 million, slightly lower than the previous year's $19.1 million. The net loss was $14.8 million, significantly reduced from a $22.2 million loss in Q3 2023. Rigetti's financial position includes $92.6 million in cash, cash equivalents, and available-for-sale investments as of September 30, 2024. The company anticipates sufficient cash flow to support operations until early 2026.Rigetti Computing Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Rigetti Computing Clears Debt, Strengthening Financial Position
Positive
Dec 9, 2024
Rigetti Computing, Inc. has fully paid off and terminated its Loan and Security Agreement with Trinity Capital Inc., resolving approximately $10.5 million in debt using cash on hand. This move effectively satisfies the company’s financial obligations, potentially strengthening its financial position and appealing to investors interested in its future growth prospects.
Private Placements and FinancingBusiness Operations and Strategy
Rigetti Computing Secures $100M for Quantum Advancements
Positive
Nov 25, 2024
Rigetti Computing has successfully raised $100 million through its ‘at-the-market’ equity offering, bolstering its pursuit of advancements in quantum computing. This capital will support their strategic initiatives in superconducting quantum technology, including improving qubit gate fidelity and scaling systems. Rigetti, known for its fast gate speeds, continues to attract interest from various sectors and believes its financial resources will sustain operations through 2026.
Executive/Board Changes
Rigetti Computing’s General Counsel Rick Danis Resigns
Neutral
Nov 8, 2024
Rick Danis, the General Counsel and Corporate Secretary of Rigetti Computing, Inc., has announced his resignation effective November 30, 2024, but will continue to provide consulting services until March 31, 2025. During this transition period, his stock options will continue to vest, and he will be eligible for a pro-rated executive performance bonus for 2024. The transition agreement allows for termination or extension with mutual consent.
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.