It is a pleasure to report that the Rigetti Computing, Inc. (NASDAQ:RGTI) is up 71% in the recent quarter. But that’s little comfort given the poor performance of prices over the past year. Like a barren lake in a warming world, shareholder value evaporated, with the stock price down 63% in that time. So the rebound should be seen in that context. It may be that the fall was an overreaction.
While the last year has been difficult for Rigetti Computing shareholders, the past week has shown signs of promise. So let’s look at the long-term fundamentals and see if they were the driver of the negative returns.
View our latest analysis for Rigetti Computing
Because Rigetti Computing has been reporting a loss over the past twelve months, we think the market is likely to be more focused on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but then good revenue growth is expected.
In the last twelve months, Rigetti Computing has increased its turnover by 52%. That’s a strong result that’s better than most other loss-making companies. Meanwhile, the share price fell 63%. Typically a growth stock like this will be volatile, with some shareholders concerned about red ink on the bottom line (aka losses). We would definitely view that as a positive if the company is trending towards profitability. If you can see this happening, then maybe consider adding this title to your watch list.
The company’s revenue and earnings (over time) are depicted in the image below (click to see exact numbers).
You can see how its balance sheet has strengthened (or weakened) over time in this one free interactive graphics.
A different perspective
While Rigetti Computing’s shareholders are down 63% on the year, the market itself is up 14%. While the goal is to do better than this, it’s worth remembering that even large long-term investments sometimes underperform for a year or more. It’s nice to see a nice 71% rebound over the past three months. This may just be a rebound because the selling has been too aggressive, but fingers crossed it’s the start of a new trend. I find it very interesting to look at the long-term share price as an indicator of corporate performance. But to really get information, we need to consider other information as well. For example, we found out 5 Warning Signs for Rejects Computing (2 don’t feel too comfortable with us!) that you should be aware of before investing here.
We’ll like Throwbacks Computing more if we see some great insider buys. While we wait, check this out free growing list of companies with recent sizable insider signings.
Please note that the market returns quoted in this article reflect the weighted average market returns of stocks currently traded on US stock exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using unbiased methodology only and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell stock and does not take into account your goals or financial situation. Our goal is to offer you long-term focused analysis driven by fundamental data. Please 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 of the stocks mentioned.
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Image Source : finance.yahoo.com