Rigetti Computing, Inc. (RGTI) has caught the attention of investors recently. The company’s stock has been among the most searched on Zacks.com.
Shares of Rigetti have dropped by 19.1% in the past month. This is in contrast to the Zacks S&P 500 composite’s gain of 1.7%. The Zacks Computer – Software industry, which includes Rigetti, has risen by 4.3% over the same time period.
Investors are now focused on where the stock might go in the future. Short-term stock prices can be affected by rumors or media reports about a company’s outlook. However, long-term investment decisions should be based on fundamental factors.
Analysts’ changes to earnings estimates can have a big impact on a stock’s fair value. When earnings estimates go up, the stock’s fair value tends to rise. This encourages investors to buy, which drives the stock price higher.
On the other hand, stable or falling estimates can have the opposite effect. For the current quarter, Rigetti Computing is expected to report a loss of $0.08 per share. This would be an improvement of 38.5% from the same quarter last year.
This estimate has stayed the same over the past 30 days. For the current fiscal year, the consensus earnings estimate is a loss of $0.34. This would be a 35.9% improvement from the previous year.
For the next fiscal year, the consensus earnings estimate is a loss of $0.26. This would be a 23.5% improvement from the expected results for this year. The stability of these estimates has contributed to Rigetti’s Zacks Rank #3 (Hold).
Rigetti shares draw mixed investor sentiment
This suggests the stock may perform in line with the broader market in the near term. Earnings growth is usually not sustainable without revenue growth.
For Rigetti Computing, the consensus sales estimate for the current quarter is $3.33 million. This would be a 7.1% increase from the same quarter last year. For the full fiscal years of 2024 and 2025, sales estimates are $12.82 million and $19.09 million.
These represent year-over-year growth of 6.8% and 48.9%, respectively. In the last reported quarter, Rigetti Computing reported revenues of $3.09 million. This was a 7.2% decline from the same period the previous year.
The earnings per share (EPS) was a loss of $0.07. This showed an improvement from the loss of $0.13 in the same quarter the previous year. The company did not meet the Zacks Consensus Estimate for revenues, which was $3.53 million.
Rigetti missed this estimate by 12.58%. However, the EPS result was a positive surprise of 30%. Over the past four quarters, Rigetti surpassed EPS estimates only once.
The company failed to meet revenue estimates in all four quarters. To determine if a stock is fairly valued, investors can compare its current valuation multiples to its historical values and those of its peers. These multiples include price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF).
Rigetti Computing’s Zacks Value Style Score is a grade of F. This indicates the stock may be trading at a premium compared to its peers. In summary, while Rigetti Computing’s current Zacks Rank suggests it might perform in line with the broader market, investors should consider the factors discussed before making any investment decisions.
For more insights and recommendations, investors can look to the latest analysis from Zacks Investment Research.
