Needham cuts Rigetti Computing stock price target on delivery timing

Needham reduced its price target on Rigetti Computing Inc. (NASDAQ:RGTI) to $15.00 from $31.00, while keeping a positive Buy rating on the stock. This adjustment was made due to the company’s third-quarter results falling short of Street expectations, primarily attributed to the timing of system deliveries. Rigetti's stock is currently trading at $12.15, marking a 45% decline year-to-date, a reflection of the significant volatility experienced in the quantum computing sector.

Notably, Rigetti achieved its goal of 99.5% median 2Q gate fidelity on its Cepheus-1-108Q system. The company anticipates deploying a system with over 300 qubits by mid-2028, with a median 2Q gate fidelity of approximately 99.7% and gate speeds of less than 60 nanoseconds. Despite these advancements, Needham's discounted cash flow valuation model resulted in a reduction of the price target to reflect multiple compression.

According to InvestingPro analysis, Rigetti appears overvalued at its current price. The firm projected that the company can secure four to six system sales before 2027. Additionally, Rigetti finalized an agreement with the U.S. Department of Commerce for up to $100 million in funding. Needham’s price target reduction was based on this discounted cash flow analysis.

InvestingPro suggests that the stock's current valuation may be excessive. For a comprehensive understanding of RGTI's valuation and access to exclusive Pro Research Reports covering over 1,400+ US stocks, readers are directed to InvestingPro. Rigetti Computing's Q3 2026 financial results were published, revealing a notable revenue shortfall.

The company reported revenue of $1.41 million, which was below the $3.67 million forecasted by analysts. The company also disclosed an adjusted loss of 6 cents per share, surpassing the expected 5 cents loss. Despite these disappointing earnings, Rigetti emphasized strong year-to-date growth and improved margins. Mizuho adjusted its price target for Rigetti Computing from $22 to $17, maintaining an Outperform rating.

Mizuho projected a revenue estimate of $9.1 million for the December quarter, slightly below the consensus estimate of $9.7 million. These financial developments indicate a challenging quarter for Rigetti, although Mizuho analysts remain optimistic about the company's potential. This article was AI-generated with editorial oversight. For further details, readers are referred to the Terms and Conditions.