Rigetti Computing (NASDAQ:RGTI) Adds $32M to Market Cap in Last 7 Days, Though Year-Ago Investors Still Down 79%

It’s nice to see the Rigetti Computing, Inc. (NASDAQ:RGTI) stock price up 14% in one week. But that doesn’t change the fact that last year’s returns were stunning. Specifically, the stock price plunged 79% during this period. So it’s not that surprising to see a bit of a rebound. Only time will tell if the company can sustain the turnaround.

Although last week was more reassuring for shareholders, they are still in the red over the past year, so let’s see if the underlying activity was responsible for the decline.

Before looking at performance, know that our analysis indicates that The RGTI is potentially overvalued!

Since Rigetti Computing has not made a profit in the last twelve months, we will focus on revenue growth to get a quick overview of its business development. Shareholders of unprofitable companies generally expect strong revenue growth. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.

Last year, Rigetti Computing saw its turnover increase by 39%. That’s certainly a respectable growth rate. Unfortunately, the market wanted something better, given that it caused the stock price to drop 79% over the course of the year. The losses may be too great for investors to handle without losing their temper. It seems that the market is worried about the future, as this development in the share price does not seem to reflect revenue growth at all.

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

We appreciate the fact that insiders have been buying stocks over the past twelve months. That said, most people consider profit and revenue growth trends to be a more meaningful guide to the business. If you are considering buying or selling Rigetti Computing stock, you should check out this free report showing analyst earnings forecast.

A different perspective

We doubt Rigetti Computing shareholders will be happy with the 79% year-over-year loss. This is below the market, which lost 17%. It’s disappointing, but it’s worth bearing in mind that selling market-wide wouldn’t have helped. The decline in the share price has continued over the past three months, down 55%, suggesting a lack of enthusiasm from investors. Basically, most investors should be wary of buying poorly performing stocks unless the company itself has clearly improved. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Take risks, for example – Rigetti Computing has 5 warning signs (and 3 that make us uncomfortable) that we think you should know about.

There are many other companies whose insiders buy shares. You probably do not want to miss this free list of growing companies insiders are buying.

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

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.