Rigetti Computing (RGTI): Evaluating Valuation Following Weaker Results, Missed Contracts, and Analyst Downgrades

Rigetti Computing (RGTI) shares have come under pressure following the company’s third-quarter earnings release. Revenue landed below last year’s mark, and net losses widened. This disappointing financial update has quickly dampened recent investor enthusiasm.

See our latest analysis for Rigetti Computing.

Rigetti Computing’s stock soared nearly 1,800% over the past year on quantum hype, yet recent weeks have brought a dramatic shift. After missing earnings expectations and losing out on a key government contract, the share price has reversed sharply, with a 46.8% decline in the last 30 days and a 25.4% slide this past week. Long-term total shareholder returns remain extraordinary, but momentum has clearly faded as risk perception grows.

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With investor optimism cooling and the stock well below analyst targets, the key question surfaces: Is this recent plunge setting up a buying opportunity, or is the market simply pricing in the tough road ahead for Rigetti?

Price-to-Book Ratio of 21.9: Is it justified?

Rigetti Computing trades at a price-to-book ratio of 21.9, positioning the stock well above both peers and the wider US semiconductor industry. At a last close of $24.69, this high valuation stands out among competitors.

The price-to-book ratio reveals how much investors are willing to pay for each dollar of the company’s net assets or equity. This metric is especially relevant in technology hardware and semiconductor firms, where tangible assets and R&D spending are significant parts of a company’s value.

Rigetti appears expensive by this metric. The stock’s price-to-book ratio of 21.9 is much higher than the peer group’s average of 5.5 and the US semiconductor industry’s average of 3.4. This reflects either high growth expectations or the possibility that the market is overpricing future potential relative to its book value.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Book ratio of 21.9 (OVERVALUED)

However, a sharp revenue decline and widening net losses could undermine any rebound, especially if Rigetti struggles to regain investor confidence in the coming quarters.

Find out about the key risks to this Rigetti Computing narrative.

Build Your Own Rigetti Computing Narrative

If you see things differently or want to dig into the numbers on your own, you can quickly assemble your own Rigetti Computing story in just a few minutes. Do it your way

A great starting point for your Rigetti Computing research is our analysis highlighting 2 key rewards and 4 important warning signs that could impact your investment decision.

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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.

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