TLDR
- Q4 revenue was $2.3 million, down slightly from last year, with full-year revenue at $10.8 million compared to $12.0 million in 2023
- Rigetti reported 99.0% fidelity in two-qubit operations on its 84-qubit Ankaa-3 system
- The company secured a strategic partnership with Quanta Computer involving an investment over $100 million
- Rigetti’s cash reserves remain strong at $217.2 million
- Several questions remain unanswered including legal issues and plans to reverse revenue decline
Rigetti Computing recently released its fourth quarter and full-year 2024 earnings results, revealing a complex picture for investors. While the quantum computing company showed progress on technical fronts, financial challenges continue to weigh on its performance. Despite these mixed signals, RGTI stock gained 4% following the announcement.
The company reported fourth quarter revenue of $2.3 million, representing a slight decrease compared to the same period last year. For the full year 2024, revenue stood at $10.8 million, down from $12.0 million in 2023.
These declining revenue figures highlight Rigetti’s ongoing financial struggles. The company continues to face high operating costs while working to advance its quantum computing technology.
One bright spot in the financial picture is Rigetti’s strong cash position. The company reported cash reserves of $217.2 million, providing a substantial cushion as it continues its research and development efforts.
On the technical front, Rigetti shared encouraging news about its 84-qubit Ankaa-3 system. The company achieved 99.0% fidelity in its two-qubit operations, an important metric in the quantum computing industry.
High fidelity is crucial for quantum computers to perform calculations accurately. This technical achievement aligns with Rigetti’s stated goals and demonstrates progress in improving its quantum processors.
The earnings report also revealed a significant strategic partnership with Quanta Computer. This collaboration includes an investment exceeding $100 million to advance superconducting quantum computing technology.
This partnership represents a strategic move by Rigetti to stabilize its revenue and scale its technology. It suggests the company is looking to expand internationally and secure additional funding for its research and manufacturing operations.
Despite these positive developments, several important questions remained unanswered during the earnings call. The company did not address reported legal issues, including investigations into whether Rigetti may have misled investors.
There was also no clear discussion about how Rigetti plans to reverse its revenue decline. The company faces growing competition from industry leaders like IBM and IonQ, both of which are making rapid advances in quantum computing.
The absence of a clear path to profitability continues to be a concern for investors watching Rigetti’s performance. While technical advances are important, the company needs to demonstrate how these will translate into sustainable growth.
Wall Street analysts maintain a positive outlook
Wall Street analysts maintain a generally positive outlook on the stock despite these concerns. Rigetti is currently rated as a Strong Buy based on evaluations from five analysts.
The average price target for RGTI stock stands at $15.25, suggesting potential upside of 86.43% from current levels. This optimistic target reflects confidence in the company’s long-term prospects despite near-term challenges.
For investors considering Rigetti stock, the company presents a mixed picture. Its strong cash position and technical advances offer reasons for optimism, while declining revenue and unanswered questions about legal issues provide cause for caution.
As Rigetti moves forward, its ability to leverage partnerships like the one with Quanta Computer while addressing revenue challenges will likely determine whether it can deliver on the potential that analysts see in its stock.
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