Analysts Have Just Cut Their Rigetti Computing, Inc. (NASDAQ:RGTI) Revenue Estimates By 17%

The analysts covering Rigetti Computing, Inc. (NASDAQ:RGTI) delivered a dose of negativity to shareholders today, by making a substantial revision to their statutory forecasts for this year. There was a fairly draconian cut to their revenue estimates, perhaps an implicit admission that previous forecasts were much too optimistic. Investors however, have been notably more optimistic about Rigetti Computing recently, with the stock price up a notable 26% to US$0.58 in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

After the downgrade, the consensus from Rigetti Computing's four analysts is for revenues of US$13m in 2023, which would reflect a noticeable 4.9% decline in sales compared to the last year of performance. Before the latest update, the analysts were foreseeing US$15m of revenue in 2023. It looks like forecasts have become a fair bit less optimistic on Rigetti Computing, given the substantial drop in revenue estimates.

View our latest analysis for Rigetti Computing

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Rigetti Computing's past performance and to peers in the same industry. These estimates imply that sales are expected to slow, with a forecast annualised revenue decline of 6.5% by the end of 2023. This indicates a significant reduction from annual growth of 52% over the last year. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 12% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Rigetti Computing is expected to lag the wider industry.

The Bottom Line

The most important thing to take away is that analysts cut their revenue estimates for this year. They also expect company revenue to perform worse than the wider market. Overall, given the drastic downgrade to this year's forecasts, we'd be feeling a little more wary of Rigetti Computing going forwards.

As you can see, the analysts clearly aren't bullish, and there might be good reason for that. We've identified some potential issues with Rigetti Computing's financials, such as dilutive stock issuance over the past year. For more information, you can click here to discover this and the 4 other warning signs we've identified.

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.