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Rigetti Computing RGTI is set to report fourth-quarter 2024 results on March 5.

The Zacks Consensus Estimate for fourth-quarter revenues is currently pegged at $2.4 million, indicating a decline of 28.99% year over year.

The consensus mark for earnings is currently pegged at a loss of 8 cents per share, unchanged over the past 30 days. The figure indicates a 11.11% increase from the year-ago quarter’s reported figure.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Rigetti Computing, Inc. Price and EPS Surprise

Rigetti Computing, Inc. price-eps-surprise | Rigetti Computing, Inc. Quote

Let’s see how things have shaped up prior to this announcement.

Key Factors to Consider for RGTI Q4 Earnings

RGTI’s focus on developing high-fidelity Quantum Processor Units and expanding its market presence through partnerships and new customer acquisitions, particularly in government and international markets, is expected to have driven growth in the to-be-reported quarter.

The company’s goal to achieve 99.5% median 2-qubit gate fidelity in its systems is expected to have driven the performance of RGTI’s quantum computing offerings in the to-be-reported quarter. This will likely improve the reliability and functionality of its products, making them more appealing to researchers and commercial partners.

Rigetti’s development of the ABAA technique for precise cubic frequencies and its work on quantum error correction in collaboration with Riverlane will likely improve the accuracy and efficiency of its quantum systems in the fourth quarter of 2024. This progress in quantum error correction will be essential for future scaling and practical applications, strengthening RGTI’s competitive position in the quantum computing market.

Rigetti’s contracts with government agencies, particularly in the defense and research sectors, provide steady revenue streams. The company’s ability to deliver complex quantum systems, such as the 24-qubit system, is likely to have generated additional revenues in the to-be-reported quarter, especially as these systems are integrated into research labs and industry projects.

RGTI Shares Underperform Sector, Industry

Rigetti shares have underperformed the Zacks Computer & Technology sector and its industry peers which includes Affirm AFRM, nCino NCNO and Atlassian TEAM in the year-to-date period.

RGTI stock has plunged 22.7% in the year-to-date period, while AFRM and TEAM shares have gained 5.3% and 16.8%, respectively. NCNO shares have lost 6.8% during the same period. The broader sector declined 3.2% over the same timeframe.

Year-to-Date Performance

RGTI has also underperformed the Zacks Internet - Software industry, which has returned 9.6% year to date.

RGTI stock is not so cheap, as suggested by the Value Score of F.

In terms of the forward 12-month Price/Sales ratio, RGTI is trading at 83.57X, higher than the industry’s 4.73X.

Price/Sales (F12M)

RGTI’s Long-term Prospects Are Bright

RGTI benefits from the growth opportunities in the quantum computing market, which, per a Grand View Research report, is expected to witness a CAGR of 20.1% from 2024 to 2030.

RGTI’s expanding clientele further underscores its growing influence in the quantum computing space.

In February 2025, Rigetti announced its collaboration with Quanta Computer to accelerate the development and commercialization of superconducting quantum computing, with both companies committing more than $100 million each over the next five years, alongside Quanta’s $35 million investment in Rigetti through share purchases, subject to regulatory approval.

This partnership leverages the company’s complementary strengths, positioning them for significant growth in the rapidly expanding quantum computing market, projected to reach $1-2 billion annually by 2030.

RGTI’s expanding portfolio in the quantum computing space has been noteworthy. In the third quarter of 2024, Rigetti successfully demonstrated 9-qubit chips with 99.4% median 2-qubit gate fidelity and announced plans to release a 36-qubit system by mid-2025. These advancements in quantum hardware are vital for RGTI’s future growth.

Rigetti Suffers From Quantum Market Challenges

Rigetti’s advancements in the quantum computing space are continuously benefiting the company’s top-line growth.

However, challenging macroeconomic uncertainties and intense competition in the rapidly evolving and highly competitive quantum computing market have negatively impacted the company’s top-line growth.

These challenges are further compounded by recent remarks from influential industry leaders.

Meta CEO Mark Zuckerberg and NVIDIA CEO Jensen Huang have both expressed doubts about the near-term practical applications of quantum computing, suggesting it may take decades to become commercially viable. The concerns raised by these high-profile CEOs’ have contributed to a market downturn affecting Rigetti in the quantum computing industry.

RGTI Shares – Buy, Sell or Hold?

Rigetti’s advancements in quantum processors and modular chip architecture will benefit the company.

However, stretched valuation, along with stiff competition, is expected to drag down RGTI shares in the near term.

Currently, Rigetti carries a Zacks Rank #3 (Hold), implying that investors should wait for a better entry point to accumulate the stock. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This article originally published on Zacks Investment Research (zacks.com).

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