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Rigetti Computing (RGTI): Assessing an Expensive Valuation After a Tumultuous Multi‑Month Share Price Swing

Simply Wall St · 1d ago

Assessing Rigetti Computing after a sharp multi month swing

Rigetti Computing (RGTI) has quietly turned into a rollercoaster trade, with the stock up more than 7x over the past year but down about 26% over the past month.

See our latest analysis for Rigetti Computing.

That recent pullback looks more like a breather than a breakdown, with a powerful 90 day share price return of 72.45% and an even stronger 1 year total shareholder return of 718.87%. This hints that momentum and expectations are still elevated.

If Rigetti’s surge has you rethinking what is possible in emerging tech, it could be worth exploring other high potential names through high growth tech and AI stocks as your next discovery step.

With shares still trading well below the average analyst target despite scorching 12 month gains, the debate now shifts from past performance to future potential: is Rigetti undervalued or already priced for aggressive quantum growth?

Price to book of 23.1x, is it justified?

Rigetti’s latest close at $26.04 implies a rich valuation premium, with the stock trading at a far higher price to book than its peers.

The price to book ratio compares a company’s market value to its net assets on the balance sheet, a useful yardstick for capital intensive, asset heavy sectors like semiconductors. For Rigetti, a 23.1x price to book multiple signals that investors are paying a steep price relative to the company’s current equity base, effectively baking in substantial expectations for future growth and commercialization of its quantum platforms.

That optimism stands in stark contrast to more grounded reference points. The wider US semiconductor industry trades at roughly 3.8x book value, and Rigetti’s peer group averages about 6.7x. Against those benchmarks, the current 23.1x multiple looks stretched, suggesting the market is assigning Rigetti a premium valuation that goes well beyond sector norms and assumes its high forecast revenue growth will ultimately translate into material economic returns.

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

Result: Price to book of 23.1x (OVERVALUED)

However, sustained heavy losses and the challenge of commercializing quantum hardware at scale could quickly sap investor patience and compress Rigetti’s premium valuation.

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

Build Your Own Rigetti Computing Narrative

If you see Rigetti’s story differently or want to dig into the numbers yourself, you can build a personalized view in 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.