Rigetti Computing (RGTI) — Deep Dive¶
Prices as of the Mon 05 Oct 2026 close · data pulled 2026-10-06 07:31:00+00:00 · refreshed weekly · methodology
Not investment advice
Educational analysis built from public data (Yahoo Finance, Kenneth French Data Library) and explicit model assumptions. Numbers update automatically; the qualitative notes are dated.
Verdict: Reduce / Avoid — 3/8 checks pass
Rigetti Computing is not yet free-cash-flow positive after stock compensation, with net cash of USD 0.4bn and consensus revenue of 0.0bn for FY2026 and 0.0bn for FY2027 (+89%). At USD 15.15 the market prices in 179% a year revenue growth after FY2027 (fading to 4%) at a 10% owner-FCF margin, or a n/a margin on the base growth path. The base-case DCF is USD 1.08 (-93%). Cash runway at the current burn: about 4.5 years.
| Check | Pass | Evidence |
|---|---|---|
| Valuation: base-case DCF at or above price | ❌ | base DCF USD 1 vs price USD 15 |
| Relative value: forward P/E at most 1.2x the peer median | ❌ | n/m FY2027E vs peer median 16.9x |
| Street: de-biased, shrunk analyst alpha > 0 (ch27) | ✅ | +15.9% |
| Momentum: 12-1 month return > 0 (ch11) | ❌ | -57% |
| Trend: price above 200-day MA (ch12) | ❌ | -17% vs 200DMA |
| Not overbought: RSI(14) below 70 | ✅ | RSI 43 |
| Fundamentals: revenue growing and FCF positive | ❌ | revenue +185% y/y, TTM FCF -0.1bn |
| Balance sheet: net cash | ✅ | net cash 0.4bn |
Snapshot¶
| Metric | Value | Metric | Value |
|---|---|---|---|
| Price | USD 15.15 | Market cap | USD 5.1bn |
| Enterprise value | USD 4.7bn | Net cash | USD 0.4bn |
| 52-week range | 12.90 – 56.34 | From 52w high | -73.1% |
| Trailing P/E (GAAP) | n/m | Forward P/E FY2026 / FY2027 | n/m / n/m |
| PEG (FY+1 P/E ÷ EPS growth) | n/a | EV / TTM revenue | 349.8x |
| TTM revenue | USD 0.0bn | TTM FCF / after SBC | -0.1bn / -0.1bn |
| Beta vs SPY (raw / Blume) | 1.97 / 1.65 | Realized vol 20d / 1y | 47% / 99% |
| Analysts / mean target | 12 / USD 29 (+88.3%) | Next earnings | 2026-11-10 |
| Shares out (diluted proxy) | 0.334bn | Short interest (% float) | 18.8% |
| Sector ETF benchmark | XLK | Cash runway (cash ÷ FCF burn) | 4.5 years |
| Institutions / insiders | 54% / 1.74% | Dividend | none |
1. Price over time¶
| Ticker | 1M | 3M | 6M | YTD | 1Y | 3Y | 5Y | 10Y | 10Y CAGR |
|---|---|---|---|---|---|---|---|---|---|
| RGTI | -0% | -16% | +7% | -32% | -62% | +982% | +55% | n/a | n/a |
| XLK | +7% | +10% | +47% | +40% | +42% | +143% | +178% | +834% | 25.0% |
| SPY | +1% | +3% | +18% | +15% | +17% | +87% | +91% | +321% | 15.5% |
| IONQ | +9% | -12% | +47% | -4% | -41% | +181% | +456% | n/a | n/a |
| QBTS | -6% | -31% | +11% | -40% | -52% | +1493% | +59% | n/a | n/a |
| QUBT | -1% | -15% | +16% | -23% | -68% | +754% | +30% | +3870% | 44.5% |
| IBM | -6% | -25% | -9% | -24% | -21% | +71% | +96% | +124% | 8.4% |
Largest one-day moves in the last 5 years: 08 Jan 2025 -45.4%, 06 Sep 2022 -37.1%, 25 Nov 2024 +58.0%, 14 Jan 2025 +47.9%, 13 Jan 2025 -32.3%.
2. Return and risk (ch.5)¶
Statistics use the 60 complete months to Sep 2026.
| Statistic | Value | What it means |
|---|---|---|
| Arithmetic mean (annualized) | 127.9% | Expected one-period return if the past repeats |
| Geometric mean (CAGR) | 10.0% | What a buy-and-hold investor actually earned; the gap ≈ σ²/2 is volatility drag |
| Standard deviation (annualized) | 220.3% | 14.1× the S&P 500's 15.7% |
| Skewness / excess kurtosis | 4.21 / 23.90 | Right-skewed, fat tails vs normal |
| 5% monthly VaR: historical / normal | -42.3% / -93.9% | One month in 20 loses at least this much |
| 5% monthly expected shortfall | -51.9% | Average loss in that worst 5% of months |
| Sharpe ratio (S&P 500) | 0.56 (0.67) | Excess return per unit of total risk |
| Sortino ratio | 1.90 | Excess return per unit of downside risk |
| Max drawdown, 5y | -96.9% (trough May 2023) | Currently -73.1% from the peak |
3. Index model, CAPM and factors (ch.8–10)¶
| Regression (60m excess returns) | Alpha (ann.) | t(α) | Beta | t(β) | R² | Residual σ |
|---|---|---|---|---|---|---|
| vs SPY | +103.6% | 1.03 | 1.97 | 1.07 | 0.02 | 218.0% |
| vs XLK | +83.7% | 0.84 | 2.10 | 1.79 | 0.05 | 214.4% |
- Risk decomposition (ch.8): systematic variance β²σ²(M) = 9.6% vs firm-specific σ²(e) = 475.4%, so 2% of the risk is market-driven and 98% is diversifiable.
- CAPM required return (ch.9): k = r_f + β × MRP = 4.02% + 1.97 × 5.5% = 14.9% (Blume-adjusted β 1.65 → 13.1%, used as the DCF discount rate).
- Historical alpha of +103.6% a year has a t-stat of 1.03: not statistically distinguishable from zero (ch.11: past alpha is a weak guide).
- Fama-French 5 factors + momentum (ch.10, 63 months to Jul 2026): R² 0.06, alpha +111.9% (t 1.09). Loadings: Mkt-RF +1.38 (t 0.7), SMB -1.79 (t -0.5), HML +0.04 (t 0.0), RMW -2.05 (t -0.7), CMA -3.09 (t -0.7), Mom -0.46 (t -0.2). The loadings describe a large-cap, style-neutral, low-profitability return profile (SMB > 0 small-cap, HML < 0 growth, RMW < 0 weak profitability, CMA < 0 aggressive investment).
4. Portfolio fit: allocation and diversification (ch.6–7)¶
Correlation of monthly returns with RGTI (60m): XLK 0.23, SPY 0.14, IONQ 0.47, QBTS 0.72, QUBT 0.50, IBM 0.11.
- A 50/50 mix with SPY would have had volatility of 111.5% vs 118.0% for the weighted average of the two, a diversification benefit because ρ = 0.14 < 1.
- Optimal risky share y* = [E(r) − r_f] / (A·σ²), holding RGTI alone against T-bills (σ = 220.3%):
| Risk aversion A | y* with CAPM E(r) | y* with E(r) + Street α |
|---|---|---|
| 2 | 1% | 3% |
| 3 | 1% | 2% |
| 4 | 1% | 1% |
| 6 | 0% | 1% |
Even a risk-tolerant investor would put only a modest share in a single stock this volatile. Ch.7–8 say the efficient choice is the market portfolio plus a Treynor-Black tilt (section 9), not a concentrated position.
5. Financial statements: quality of earnings (ch.19)¶
| Quarter | Revenue | Q/Q | Gross m. | Op. m. (GAAP) | Net m. | R&D % | SBC % | Diluted EPS | FCF | FCF m. | DSO (days) | DIO (days) |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025-06 | 0.0bn | n/a | 31.4% | -1103.9% | -2201.8% | 750.8% | 197.3% | -0.13 | -0.02bn | -1212.4% | 89 | n/a |
| 2025-09 | 0.0bn | +8% | 20.7% | -1055.4% | -10321.9% | 771.4% | 220.8% | -0.62 | -0.02bn | -1012.4% | 106 | n/a |
| 2025-12 | 0.0bn | -4% | 34.9% | -1209.7% | -974.7% | 928.7% | 298.6% | -0.06 | -0.02bn | -1042.5% | 124 | n/a |
| 2026-03 | 0.0bn | +136% | 31.3% | -589.8% | 752.5% | 453.6% | 133.9% | -0.06 | -0.02bn | -468.8% | 91 | n/a |
| 2026-06 | 0.0bn | +17% | 42.6% | -546.2% | -1023.9% | 403.4% | 136.6% | -0.16 | -0.03bn | -540.5% | 68 | n/a |
- DuPont, TTM: ROE -46.0% = net margin -1787.4% × asset turnover 0.02 × leverage 1.25. Net income is negative, so ROE is negative; the business is not yet earning its cost of equity.
- Cash conversion: TTM operating cash flow -0.1bn vs net income -0.2bn. The accruals ratio of -27.5% of assets is negative (cash earnings exceed accounting earnings), a sign of high-quality earnings.
- Stock-based compensation of 0.0bn TTM (170.7% of revenue) is a real cost to shareholders. The valuation below uses FCF after SBC (owner FCF margin -150.0%). Buybacks were n/a; share count changed +3.1% over the year.
- Operating leverage (ch.17): not meaningful: EBIT was negative or sales barely moved between the last two fiscal years.
6. Valuation (ch.18)¶
Multiples vs peers (Yahoo Finance, TTM and next-year; peers chosen by hand in config.json):
| Ticker | Fwd P/E | P/S TTM | EV/EBITDA | FCF yield | Rev. growth FY | Gross m. | EBIT m. | ROE TTM | Target upside |
|---|---|---|---|---|---|---|---|---|---|
| RGTI | -73.5x | 378.7x | -53.5x | 1% | 185% | 35% | -546% | -44% | 88% |
| IONQ | -33.2x | 70.6x | -18.1x | -1% | 287% | 31% | -408% | -60% | 55% |
| QBTS | -41.4x | 477.9x | -33.0x | -1% | -1% | 64% | -1732% | -28% | 122% |
| QUBT | -33.5x | 182.9x | -14.2x | -3% | 9000% | -19% | -281% | -2% | 135% |
| IBM | 16.9x | 3.0x | 16.1x | 6% | 1% | 58% | 17% | 34% | 9% |
| Peer median | -33.4x | 126.8x | -16.1x | -1% | 144% | 44% | -345% | -15% | 88% |
Growth embedded in the price (PVGO). Next-year EPS is expected to be negative (USD -0.21), so the whole price is PVGO: it rests entirely on future profits that do not exist yet.
Constant-growth check. On TTM owner FCF, P = FCF₁/(k − g) implies a perpetual growth rate of 15.5%, above the 4% long-run nominal-GDP ceiling the book recommends for g.
Scenario DCF (owner FCF, k = 13.1%, terminal g = 4%). The revenue path is FY2026 (0.0bn), then the FY2027 low/avg/high estimate, then growth that fades linearly to 4% over 8 years. Owner-FCF margin ramps from today's -150.0% to the scenario margin over 5 years. Scenario assumptions are generic (derived from consensus growth and today's owner-FCF margin).
| Scenario | FY2027 revenue | Growth after | Owner-FCF margin | FY2035 revenue | Terminal value share | Value / share | vs price |
|---|---|---|---|---|---|---|---|
| Bear | 0.0bn | 15% | 3% | 0bn | n/a | USD 0.94 | -94% |
| Base | 0.0bn | 30% | 10% | 0bn | n/a | USD 1.08 | -93% |
| Bull | 0.1bn | 40% | 17% | 0bn | 162% | USD 1.52 | -90% |
Reverse DCF: what today's price assumes. On the base revenue path the price requires a steady-state owner-FCF margin of n/a. At the base 10% margin it requires 179% growth after FY2027.
Sensitivity: base revenue path, value per share by discount rate (rows) and steady-state owner-FCF margin (columns).
| k \ margin | 6% | 8% | 10% | 12% | 15% |
|---|---|---|---|---|---|
| 10.1% | 1.03 | 1.14 | 1.24 | 1.34 | 1.50 |
| 11.1% | 0.99 | 1.08 | 1.16 | 1.25 | 1.38 |
| 12.1% | 0.96 | 1.03 | 1.11 | 1.18 | 1.29 |
| 13.1% | 0.94 | 1.00 | 1.06 | 1.13 | 1.22 |
| 14.1% | 0.92 | 0.98 | 1.03 | 1.09 | 1.17 |
| ## 7. Market efficiency and earnings reactions (ch.11) |
Market-model abnormal returns (vs SPY, estimated over the 250 days before each event) for the last 12 releases:
| Announced | Reaction day | EPS vs est. | Surprise | AR day 0 | CAR [−1,+1] | Drift CAR [+2,+20] |
|---|---|---|---|---|---|---|
| 2026-08-06 | 2026-08-07 | -0.05 vs -0.05 | -8.1% | +6.3% | +4.1% | -10.3% |
| 2026-05-11 | 2026-05-12 | -0.04 vs -0.04 | 6.7% | -6.6% | -4.6% | +21.2% |
| 2026-03-04 | 2026-03-05 | -0.03 vs -0.03 | 8.7% | -3.3% | +2.6% | -16.2% |
| 2025-11-10 | 2025-11-11 | -0.03 vs -0.04 | 25.0% | -7.5% | -27.3% | -40.4% |
| 2025-08-12 | 2025-08-13 | -0.06 vs -0.04 | -41.2% | +4.0% | +3.9% | -39.2% |
| 2025-05-12 | 2025-05-13 | -0.08 vs -0.04 | -89.2% | -17.6% | -1.8% | -18.1% |
| 2025-03-05 | 2025-03-06 | -0.06 vs -0.06 | 4.6% | +9.3% | +15.4% | -2.4% |
| 2024-11-12 | 2024-11-12 | -0.09 vs -0.07 | -27.9% | -0.9% | +13.7% | +179.6% |
| 2024-08-08 | 2024-08-09 | -0.09 vs -0.06 | -53.5% | -6.2% | +1.4% | -22.6% |
| 2024-05-09 | 2024-05-10 | -0.11 vs -0.08 | -36.4% | -10.3% | -1.6% | -39.3% |
| 2024-03-14 | 2024-03-15 | -0.04 vs -0.06 | 31.5% | +1.4% | -0.4% | -61.3% |
| 2023-11-09 | 2023-11-10 | -0.13 vs -0.10 | -27.3% | -12.1% | -0.5% | -16.4% |
- Average absolute day-0 abnormal move: 7.1%. The sign of the EPS surprise matched the sign of the reaction 58% of the time, which is close to a coin flip: guidance and commentary matter more than the headline EPS beat.
- Post-announcement drift: the correlation between the initial reaction and the next-20-day drift is 0.46. A positive value hints at under-reaction (PEAD, ch.11–12), though with only 12 events the evidence is weak.
8. Technicals and behavioural signals (ch.12)¶
| Indicator | Value | Read |
|---|---|---|
| Price vs 50-day / 200-day MA | -6% / -17% | Death cross (50 < 200) |
| RSI(14) | 43 | Neutral |
| 12-1 month momentum | -57% | Negative (Jegadeesh-Titman) |
| 6-month relative strength vs XLK | -28% | Laggard |
| Insider sales / purchases, last 6m | USD 0.02bn / USD 0.00bn | Net selling, often planned 10b5-1 sales; insider buying is the informative signal (ch.11) |
| Analyst actions, last 90 days | 1 actions, 0 target raises | Few target raises: the Street is not chasing the stock |
| Recent targets below current price | 0% | Most targets still sit above the price |
| Ratings (strong buy / buy / hold / sell) | 1 / 8 / 4 / 0 | Mixed views: less crowded positioning |
| FY2027 EPS estimate: now vs 90 days ago | -0.21 vs -0.20 | +2% revision; up/down revisions in the last 30 days: 2/0 |
9. Treynor-Black: should an active manager overweight it? (ch.27)¶
| Step | Value |
|---|---|
| Analyst-implied 12m return (mean target / price − 1) | +88.3% |
| CAPM 1-year required return (raw β) | 14.9% |
| Raw alpha | +73.4% |
| Minus average analyst optimism bias (Top-30 cross-section) | -9.9% |
| Shrunk alpha (× 0.25, for forecast imprecision) | +15.9% |
| Residual variance σ²(e) | 475.4% |
| Initial active weight w₀ = [α/σ²(e)] / [E(R_M)/σ²_M] | +1.5% |
| Beta-adjusted weight w* = w₀ / [1 + (1 − β)w₀] | +1.5% |
A positive weight means an active manager would hold more than its index weight.
10. Options market view (ch.20–21)¶
| Expiry | Days | ATM IV | Implied ±1σ move to expiry | 90% put − 110% call IV (skew) |
|---|---|---|---|---|
| 2026-10-16 | 11 | 64% | ±11.1% (±1.69) | +1.3% |
| 2026-10-23 | 18 | 63% | ±14.0% (±2.12) | -0.4% |
| 2026-10-30 | 25 | 63% | ±16.6% (±2.52) | -0.2% |
| 2026-11-06 | 32 | 69% | ±20.3% (±3.08) | +1.4% |
| 2026-11-13 | 39 | 72% | ±23.4% (±3.54) | -29.6% |
| 2026-11-20 | 46 | 71% | ±25.3% (±3.84) | +3.1% |
| 2026-12-18 | 74 | 72% | ±32.5% (±4.92) | -1.6% |
| 2027-01-15 | 102 | 72% | ±38.0% (±5.76) | +2.0% |
| 2027-02-19 | 137 | 71% | ±43.5% (±6.59) | +5.1% |
| 2027-03-19 | 165 | 73% | ±48.8% (±7.39) | -7.4% |
| 2027-05-21 | 228 | 76% | ±59.9% (±9.08) | -23.1% |
| 2027-06-17 | 255 | 77% | ±64.0% (±9.69) | -2.9% |
- Earnings-implied move: the jump in variance from the 2026-11-06 expiry (IV 69%) to 2026-11-13 (IV 72%) prices an earnings-day move of ±6.6% (1σ), or about ±5.3% in absolute terms (≈ ±0.80). Compare the historical average absolute reaction of 7.1% in section 7.
- Implied vs realized: the ~1-month ATM IV is 69% vs realized 47% (20d) / 77% (60d) / 99% (1y). Options are cheap relative to recent realized volatility, so buying protection is relatively inexpensive.
- Put-call parity (ch.20): at the ATM strike for 2026-11-06, C − P − (S − PV(K)) = +0.01 per share. Close to zero, as parity requires.
- Quotes were unavailable when the data was pulled (outside market hours), so implied vols use each contract's last trade price. Treat them as approximate; illiquid strikes can be stale.
Premium-selling menu for holders: the last expiry before earnings (2026-11-06), about 0.15/0.20/0.25/0.30 delta.
| Type | Strike | Bid / Ask | Price | IV | Delta | P(expires OTM) | Distance | Yield | Annualized | OI |
|---|---|---|---|---|---|---|---|---|---|---|
| Call | 18.0 | – | 0.36 | 67% | +0.23 | 83% | +18.8% | 2.38% | 27% | – |
| Call | 18.5 | – | 0.35 | 73% | +0.21 | 85% | +22.1% | 2.31% | 26% | – |
| Call | 19.5 | – | 0.74 | 112% | +0.28 | 82% | +28.7% | 4.88% | 56% | – |
| Call | 20 | – | 0.21 | 76% | +0.13 | 91% | +32.0% | 1.39% | 16% | – |
| Put | 12.5 | – | 0.23 | 67% | -0.14 | 81% | -17.5% | 1.84% | 21% | – |
| Put | 13.0 | – | 0.35 | 68% | -0.19 | 75% | -14.2% | 2.69% | 31% | – |
| Put | 13.5 | – | 0.50 | 69% | -0.25 | 69% | -10.9% | 3.70% | 42% | – |
| Put | 14.0 | – | 0.66 | 68% | -0.30 | 62% | -7.6% | 4.71% | 54% | – |
Calls = covered calls on shares you own (yield on the share price); puts = cash-secured puts (yield on the strike). Prices are last trades at the data pull and indicative only; check live quotes before trading.
11. Our hourly signal model¶
RGTI is not in the Top-30 signal universe.
12. Qualitative analysis: business, PEST, catalysts and risks¶
Qualitative notes reviewed 2026-10-06
These notes are written by hand, unlike the auto-refreshed numbers above. Events up to late 2025 come from company announcements. Later developments are inferred from the data (consensus estimates, price reactions) and should be checked against RGTI's 10-Q/10-K filings and earnings calls.
Business in one paragraph¶
Rigetti Computing builds superconducting quantum processors, quantum cloud services and on-premise systems such as Novera. It controls chip design, fabrication and system integration, which can speed iteration but requires heavy capital and specialized talent. Revenue is mainly research contracts, system sales and cloud access, still far below operating expenses. The investment case hinges on whether Rigetti can improve fidelity and scale multi-chip systems fast enough to win government, academic and enterprise budgets before cash burn, dilution or larger competitors narrow its window.
Key developments¶
| When | Event | Why it matters |
|---|---|---|
| Nov 2024 | Rigetti raised about USD 100M through an equity offering. | Extended runway after a period of listing and liquidity pressure, but diluted shareholders. |
| Dec 2024 | Rigetti launched the 84-qubit Ankaa-3 system with a reported 99.5% median two-qubit gate fidelity. | Important technical proof point for superconducting-qubit competitiveness. |
| 2025 | Novera system orders and research collaborations continued with government and academic customers. | Shows some demand for on-premise experimental systems, though revenue remains small. |
| Q2 2025 | Rigetti completed a large at-the-market equity raise and reported substantially higher cash (reported). | Strengthened runway but made dilution a core part of the story. |
| Q3 2025 | Management outlined a roadmap toward 100-plus, 150-plus and 1,000-plus qubit systems (reported). | Sets visible milestones but also raises execution risk if fidelity does not scale with qubit count. |
PEST analysis¶
| Factor | Tailwinds | Headwinds | Net |
|---|---|---|---|
| Political | US quantum funding, national-security interest and academic grants support early demand. | Government procurement is slow and budget-dependent; export controls can limit international sales. | ⚖️ |
| Economic | Fresh equity capital gives Rigetti time to pursue the roadmap. | Revenue is tiny versus losses, and the company may need future dilution if commercialization is slower than expected. | ⚠️ |
| Social | Quantum computing attracts research partners and talent; cloud access broadens experimentation. | Enterprise buyers remain skeptical until useful, repeatable applications are shown. | ⚖️ |
| Technological | Superconducting systems benefit from existing microwave-control expertise and chip-fabrication learning curves. | Fidelity, cryogenics, error correction and multi-chip interconnects are hard; IBM, Google and others have deeper resources. | ⚖️ |
Bull case vs bear case¶
- Bull: Ankaa-3 fidelity proves durable, the chiplet roadmap scales, and government or lab customers buy systems while cloud usage grows. With cash runway improved, Rigetti can demonstrate progress without near-term balance-sheet stress.
- Bear: Larger rivals set the pace, Rigetti misses fidelity or qubit milestones, revenue remains lumpy, and equity markets become less willing to fund losses. A higher cash balance helps, but dilution risk remains if commercialization stays distant.
Catalysts to watch (next 6–12 months)¶
- Delivery and performance data for the 100-plus qubit roadmap milestone.
- Novera orders, government contracts and any repeat customers.
- Cash burn versus reported cash and investment balances.
- Technical metrics: gate fidelity, uptime, calibration time and multi-chip performance.
- Competitive announcements from IBM, Google, IonQ and neutral-atom peers.
What would change the verdict¶
- More constructive: verified fidelity gains at larger scale, recurring contract revenue, controlled burn and no need for new equity.
- More cautious: missed roadmap dates, falling cash from faster burn, weak bookings, or a competitor demonstrating materially better error-corrected progress.
Generated by analyses/deep-dives/deep_dive.py. Quantitative sections refresh weekly; the qualitative notes carry their own review date.