Rigetti Computing's Price Target Increased to $19 by B. Riley Financial

B. Riley Financial has raised its price target for Rigetti Computing (RGTI) to $19 from $15 and maintains a Buy rating. The company's Q1 2025 revenue was $1.5 million, down from $3.1 million in Q1 2024. Gross margins dropped to 30% from 49%, and operating expenses increased to $22.1 million from $18.1 million. The company reported an operating loss of $21.6 million for Q1 2025.

Rigetti Computing (RGTI) stock experienced a notable 30% surge on July 16, 2023, following the company's announcement of achieving 99.5% median two-qubit gate fidelity on its modular 36-qubit system. This significant milestone marks an important step towards commercial viability in the quantum computing sector [1]. The breakthrough, achieved by Rigetti's proprietary modular chip technology, combines four 9-qubit "chiplets" to create a 36-qubit system, addressing the critical challenge of maintaining high performance while scaling up quantum systems [1].

The announcement comes at a favorable time for quantum investments, with the sector transitioning from research to commercial applications. Rigetti plans to launch its 36-qubit system on August 15, 2023, and aims to deliver a system with over 100 qubits by the end of 2025 [1]. However, the company faces challenges in monetizing its advancements, as it has reported year-over-year revenue declines for four consecutive quarters. In Q1 2025, Rigetti reported revenue of $1.5 million, down from $3.1 million in the same period the previous year [1].

Despite these financial setbacks, Rigetti has secured several strategic wins that position it well for the transition to commercial quantum computing. The company was selected for DARPA's quantum benchmarking initiative, advancing to Stage A with a $1 million award, and received a $5.48 million award from an Air Force consortium to advance its ABAA chip fabrication technology [1]. Additionally, Rigetti secured three UK Innovate awards to collaborate on quantum error correction with the National Quantum Computing Center and a $250 million commitment from Quanta for non-QPU hardware development [1].

B. Riley Financial has raised its price target for Rigetti Computing to $19 from $15, maintaining a Buy rating. The company's Q1 2025 revenue was $1.5 million, down from $3.1 million in Q1 2024. Gross margins dropped to 30% from 49%, and operating expenses increased to $22.1 million from $18.1 million. The company reported an operating loss of $21.6 million for Q1 2025 [2].

Analysts tracking RGTI stock anticipate sales to increase from $10.8 million in 2024 to $150 million by 2029, with losses per share expected to narrow from $0.29 in 2024 to $0.16 in 2028. Out of the six analysts covering RGTI stock, five recommend a "Strong Buy" and one recommends a "Moderate Buy." The average RGTI stock price target is $14.83, which is below the current price [1].

References:
[1] https://finance.yahoo.com/news/rigetti-just-hit-quantum-computing-191737929.html
[2] https://www.indexbox.io/blog/rigetti-computing-achieves-breakthrough-in-quantum-computing/