Revenue Downgrade: Here's What Analysts Forecast For Rigetti Computing, Inc. (NASDAQ:RGTI)

The latest analyst coverage could presage a bad day for Rigetti Computing, Inc. (NASDAQ:RGTI), with the analysts making across-the-board cuts to their statutory estimates that might leave shareholders a little shell-shocked. Revenue estimates were cut sharply as analysts signalled a weaker outlook - perhaps a sign that investors should temper their expectations as well. Bidders are definitely seeing a different story, with the stock price of US$0.90 reflecting a 14% rise in the past week. Whether the downgrade will have a negative impact on demand for shares is yet to be seen.

Following the downgrade, the latest consensus from Rigetti Computing's five analysts is for revenues of US$13m in 2024, which would reflect a satisfactory 4.9% improvement in sales compared to the last 12 months. Before the latest update, the analysts were foreseeing US$15m of revenue in 2024. It looks like forecasts have become a fair bit less optimistic on Rigetti Computing, given the measurable cut to revenue estimates.

View our latest analysis for Rigetti Computing

Notably, the analysts have cut their price target 12% to US$2.75, suggesting concerns around Rigetti Computing's valuation.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Rigetti Computing's revenue growth is expected to slow, with the forecast 10% annualised growth rate until the end of 2024 being well below the historical 20% p.a. growth over the last three years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 18% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Rigetti Computing.

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. The consensus price target fell measurably, with analysts seemingly not reassured by recent business developments, leading to a lower estimate of Rigetti Computing's future valuation. Often, one downgrade can set off a daisy-chain of cuts, especially if an industry is in decline. So we wouldn't be surprised if the market became a lot more cautious on Rigetti Computing after today.

Unanswered questions? At least one of Rigetti Computing's five analysts has provided estimates out to 2026, which can be seen for free on our platform here.

Another way to search for interesting companies that could be reaching an inflection point is to track whether management are buying or selling, with our free list of growing companies backed by insiders.

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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.