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Is Rigetti Computing’s Dip a Buying Opportunity?

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
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Rigetti Computing Inc.’s stock is influenced by the anticipation of a strategic shift and potential leadership changes, amidst heightened scrutiny over its financial sustainability. On Wednesday, Rigetti Computing Inc.’s stocks have been trading down by -3.22 percent.

Market Update: Key Highlights

  • The recent sale of 351,785 shares by Rigetti’s CTO, David Rivas, worth nearly $2.73M, has raised eyebrows and led investors to question the internal confidence within the company. This development emerged from an official Form 4 SEC filing which shows that even after the sale, Rivas holds control over 1 million shares directly.

Candlestick Chart

Live Update At 17:03:26 EST: On Wednesday, March 19, 2025 Rigetti Computing Inc. stock [NASDAQ: RGTI] is trending down by -3.22%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

  • Following unfavorable earnings reports, Rigetti Computing’s Q4 revenue fell short of the estimated $2.5M target, coming in at $2.27M. This underperformance coincides with a widening quarterly loss, as announced, with the company’s earnings failing to meet expectations, resulting in a noticeable drop during after-hours trading.

  • Intense scrutiny surrounds the disclosure of Rigetti Computing’s challenging financials, particularly highlighting broader losses than previously anticipated, which has directly affected the stock’s bearish performance in the current period.

Recent Earnings and Financial Metrics

In trading, it’s essential to remain grounded and not be swayed by the fear of missing out on potential opportunities. As millionaire penny stock trader and teacher Tim Sykes says, “There is always another play around the corner; don’t chase just because you feel FOMO.” This mindset helps traders maintain discipline and focus on their strategies, rather than making impulsive decisions based on emotion. By understanding that opportunities are abundant, traders can approach their craft with patience and precision, allowing for more consistent success in the long run.

Revenue Shortcomings

In an environment where expectations were already tempered, Rigetti released a less-than-stellar earnings report. Their Q4 figures show earnings per share (EPS) at a loss of (68c), in stark contrast to a consensus estimate of (6c). Furthermore, revenue stood at $2.27M while it was originally projected by FactSet figures to hit $2.5M. Such discrepancies reflect the challenges that Rigetti is facing in achieving its financial targets, and the subsequent lose in investor faith.

Balance Sheet Insights

Delving deeper, the financial reports reveal Rigetti’s persistent struggle with profitability. A continuing concern is their EBITDA margin at -1780.7, and those negative figures speak volumes. The earnings landscape shows a net operating loss, perpetuated by high operating expenses relative to their current revenue streams, building a financial narrative that is replete with challenges.

More Breaking News

Debt and Liquidity

Rigetti displays a promising total debt-to-equity ratio at 0.07. It highlights their moderate use of leverage. Meanwhile, high current and quick ratios further signify liquidity cushioning. In terms of asset management, Rigetti’s asset turnover may seem meek at 0.1, but it showcases a business in growth phase, working to optimize its asset base.

Cash Flow Review

Their cash flow displays noticeable changes, particularly in operational adjustments which resulted in a half-notch improvement, although Rigetti still operates with a negative free cash flow. The capital expenditures being kept at bay however, is a cautious but necessary move to conserve cash for more strategic investments or buffer for future unexpected fluctuations in income.

Analyzing the Skip in Share Prices

The Role of Management Decisions

David Rivas’s sale of over 350 thousand shares has raised questions among investors, especially contextually in the light of the stats-savvy boardroom strategies often employed to fortify public company positioning. Such actions can stir market sentiment, leading to assumptions of fiscal caution or even a loss of confidence in imminent future growth.

Deciphering Q4 Results Impact

Rigetti’s telling Q4 results have clearly weighed heavily upon its market performance. Missing both EPS and revenue targets is a reminder of their consistent struggle to align R&D spend with fiscal allocation efficiency and practical return. These results have paired investor sentiments with caution and patience, awaiting signs of recovery or forward-facing strategies to redirect momentum.

Pondering Strategic Developments

Despite revenue doldrums, Rigetti’s strong liquidity positions them within comfortable bounds to weather industry waves and maintain capital flexibility. Still, portraying robust profitability remains elusive as the firm grapples to plug funnelled R&D efforts into effective earnings realization. This critical juncture calls for a reevaluation of strategical vectors to mitigate outward apprehensions.

Conclusion

Rigetti Computing, with its rich technological promise and market footprint, represents an intriguing, albeit risky trading avenue. Traders with bearings in the firm’s capacity for innovation may find this a timely window for calculated positioning, especially if the recent dip presents an underestimated opportunity with long-term scaling potential. Nonetheless, observers must keep their lens focused on Rigetti’s earnings reports and its upcoming tactics to refocus their expanding R&D initiatives to stabilize profitability narratives and pivot away from current fiscal unease.

As millionaire penny stock trader and teacher Tim Sykes, says, “Be patient, don’t force trades, and let the perfect setups come to you.” In sum, while financial turbulence curtails immediate optimism, keen foresight could potentially unlock value for those willing to weather through current storms with linked opportunities on the horizon. This decision ultimately hinges on stakeholders’ risk tolerance and faith in Rigetti’s capacity to course-correct and evolve amidst unfolding market pressures.

This is stock news, not investment advice. Timothy Sykes News delivers real-time stock market news focused on key catalysts driving short-term price movements. Our content is tailored for active traders and investors seeking to capitalize on rapid price fluctuations, particularly in volatile sectors like penny stocks. Readers come to us for detailed coverage on earnings reports, mergers, FDA approvals, new contracts, and unusual trading volumes that can trigger significant short-term price action. Some users utilize our news to explain sudden stock movements, while others rely on it for diligent research into potential investment opportunities.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”