This week we saw Rigetti Computing, Inc. (NASDAQ:RGTI) (NASDAQ:RGTI) share price rose 27%. But that’s not much consolation for the painful decline we’ve seen last year. For intelligence, the stock is down 80% over the past year. It’s not uncommon to see a bounce after a drop like this. Only time will tell if the company is able to sustain the transformation.
Although last week was more reassuring for shareholders, they have been in the red for the past year, so let’s see if core business is responsible for the pullback.
Given that Rigetti Computing has not been profitable in the past 12 months, we will focus on revenue growth to quickly form a vision for the development of its business. In general, the revenue of non-profitable companies is expected to increase every year, and at a good rate. As you can imagine, rapid revenue growth, when maintained, often leads to rapid earnings growth.
Rigetti Computing has grown its revenue by 39% over the past year. This is definitely a respectable growth rate. Unfortunately, the market wanted something better, since it sent the stock price down 80% during the year. Losses may be too much for investors to bear without losing their nerve. We were assuming the future looked challenging, given the disconnect between revenue growth and stock price.
You can see how earnings and revenue have changed over time in the image below (click on the graph for exact values).
We consider it positive that insiders have made significant purchases in the past year. Having said that, most people consider earnings and revenue growth trends as a more useful guide for business. So it makes a lot of sense to check what analysts think Rigetti Computing will do Earn In The Future (Free Earnings Predictions).
Rigetti Computing shareholders are down 80% for the year, worse than the market’s loss of 23%. There is no doubt that this is a disappointment, but perhaps the stock will do better in a stronger market. The stock price has continued to decline over the last three months, down 51%, indicating a lack of enthusiasm on the part of investors. Given this stock’s relatively short history, we will remain very cautious until we see some strong business performance. While it is worth considering the various effects that market conditions can have on a stock price, there are other factors that are more important. Case in point: We spotted 5 Warning Signs of Rigetti Computing You should be aware of them, and 3 of them are important.
Rigetti Computing isn’t the only stocks insiders are buying. For those who like to find winning investments this is Free The list of companies growing with recent in-house purchases, could be just the ticket.
Please note that the market returns mentioned in this article reflect the weighted average market returns of the stocks currently traded on US stock exchanges.
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