Recent share performance and business snapshot

Rigetti Computing (RGTI) has drawn fresh attention after a recent daily move of about 5%, capping a gain of roughly 14% over the past month and close to 20% over the past 3 months.

With a market value of about US$6.1b and annual revenue of US$10.0m, the company remains early in its commercial phase. It reported a net loss of US$225.7m from its quantum computing operations.

Rigetti’s recent 1-day share price return of 4.64% and 30-day share price return of 14.23% come against a year-to-date share price decline of 18.35%, while the 1-year total shareholder return of 66.98% indicates momentum has shifted positively over a longer horizon.

If Rigetti’s swings have caught your eye, it could be a good moment to see what else is moving in quantum computing and related hardware using our discovery tool for 27 quantum computing stocks

With the stock up strongly over the past year but still trading below some analyst targets, the key question is whether Rigetti is still undervalued or whether the market is already pricing in future growth.

Most Popular Narrative: 21.3% Undervalued

Compared with Rigetti’s last close at $19.27, the most followed narrative fair value of $24.50 points to meaningful upside in the story that investors are tracking.

The trajectory of quantum computing, particularly in the context of Rigetti Computing and the Quantum Benchmark Testing System (QBTS), could witness significant shifts. Trump's emphasis on "America First" policies might lead to increased funding for public-private partnerships and The Defense Advanced Research Projects Agency (DARPA)'s R&D works in critical technologies, including quantum computing, as part of national security and technological supremacy initiatives.

Want to know what earnings profile justifies that higher fair value, according to LongTermer? The narrative leans on aggressive revenue expansion, rising profit margins and a premium future earnings multiple.

Result: Fair Value of $24.50 (UNDERVALUED)

However, this depends on a loss making business model and user assumptions about higher future profit margins, which could be challenged by slower demand or tighter funding.

Another View: Market Pricing Looks Stretchy

The community’s fair value of $24.50 suggests upside, but the market is currently paying a rich P/B of 11x, compared with 8.8x for peers and 6.2x for the wider US Semiconductor industry. That premium, on top of ongoing losses, raises a simple question: how much optimism are you really paying for?

Next Steps

With mixed signals on valuation and sentiment, it makes sense to act promptly and review the full risk reward picture for yourself using 1 key reward and 2 important warning signs

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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.