Rigetti Computing (NASDAQ:RGTI) adds US$32m to market cap in the past 7 days, though investors from a year ago are still down 79%

It's nice to see the Rigetti Computing, Inc. (NASDAQ:RGTI) share price up 14% in a week. But that doesn't change the fact that the returns over the last year have been stomach churning. Specifically, the stock price nose-dived 79% in that time. So it's not that amazing to see a bit of a bounce. Only time will tell if the company can sustain the turnaround.

Although the past week has been more reassuring for shareholders, they're still in the red over the last year, so let's see if the underlying business has been responsible for the decline.

Before we look at the performance, you might like to know that our analysis indicates that RGTI is potentially overvalued!

Given that Rigetti Computing didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year Rigetti Computing saw its revenue grow by 39%. That's definitely a respectable growth rate. Unfortunately, the market wanted something better, given it sent the share price 79% lower during the year. It could be that the losses are too much for investors to handle without losing their nerve. It seems that the market has concerns about the future, because that share price action does not seem to reflect the revenue growth at all.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling Rigetti Computing stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

We doubt Rigetti Computing shareholders are happy with the loss of 79% over twelve months. That falls short of the market, which lost 17%. That's disappointing, but it's worth keeping in mind that the market-wide selling wouldn't have helped. The share price decline has continued throughout the most recent three months, down 55%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - Rigetti Computing has 5 warning signs (and 3 which make us uncomfortable) we think you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.