Sign InRigetti Computing Eyes Resistance Test as Volatility and Cash Flow Improve Despite Financial Challenges
Summary
On March 7, 2025, Rigetti Computing, Inc. (RGTI) closed at $9.35, reflecting a 9.87% rise as it approaches a critical resistance level amidst ongoing volatility and mixed indicators of future growth potential.
Technical Analysis
Rigetti Computing, Inc. (RGTI) closed at $9.35 on March 7, 2025, experiencing a notable increase of 9.87% from the prior session. Trading within a range of $8.26 to $9.50, the stock is approaching its resistance level of $10.04. The RSI14 stands at 36, indicating that the stock is approaching an oversold condition, potentially signaling a bullish reversal soon. However, the MACD reading of -1.48 suggests ongoing bearish momentum, and the stock remains below both its 50-day moving average ($12.10) and its 200-day moving average ($4.22). The high ATR value implies considerable volatility, pointing to potential sharp price movements in the near term.
Fundamental Analysis
Rigetti Computing's current market cap is $2.27 billion. Although the company operates with a negative EPS of -1.09 and a PE ratio of -8.58, recent liquidity improvements enhance its financial stability. The company has successfully secured $217.2 million in cash and investments, alongside an additional commitment of $35 million from Quanta Computer. Despite these positive cash flow developments, the firm continues to grapple with revenue decline and high valuations, reflected in an estimated 150x forward sales.
The recent news highlights both risk factors and advancements, with particular emphasis on Rigetti achieving milestones such as the first academic sale of its Novera QPU. While growth prospects are substantial, the company remains in a nascent stage of revenue expansion and faces intense market competition.
Stock Performance Prediction
For the next trading day, March 10, 2025, technical indicators and bullish sentiment suggest RGTI could attempt another test of its resistance at $10.04, driven by the improved liquidity news. In the upcoming week, potential volatility remains high; if RGTI breaks through the resistance level, it might escalate further, although broader market conditions will heavily influence momentum.
Intrinsic Value and Long-Term Potential
Rigetti's intrinsic value remains challenging to quantify due to its negative earnings and high forward valuation multiples. The significant cash reserves and partnership with Quanta provide a solid foundation for future development. However, the realization of substantial revenue growth remains years away, and the need for additional capital raises could dilute shareholder value.
Overall Evaluation: Hold
Rigetti Computing is categorized as a 'Hold.' Although near-term volatility is expected, ongoing liquidity improvements and strategic partnerships provide a buffer to support long-term research and development. Investors may see potential in Rigetti's future growth in the quantum computing industry, but financial instability, cash burn, and existing market uncertainty warrant caution. The stock's future trajectory will largely depend on continued development milestones and stabilization of revenue streams.
