Rigetti Computing Improving Gate Fidelity Would Make It Viable Acquisition Target: Analyst

Needham analyst Quinn Bolton maintained Rigetti Computing Inc RGTI with a Buy and lowered the price target from $3 to $1.
RGTI slightly beat 2022 sales expectations but provided no 2023 sales guidance. Sales of $6.1 million surpassed Bolton's $3.4 million estimate and the $4.4 million consensus.
FY22 sales of $13.1 million slightly surpassed guidance of $12 million - $13 million, consistently reiterated throughout the year.
RGTI maintained a cash balance of $143 million at year-end or $1.00 of net cash per share.
The new management team highlighted improving 2-qubit gate fidelity to 98% in 2023 and 99% in 2024; and managing the 2023 year-end cash balance to $65 million - $75 million (no additional funding until at least late-2024).
The analyst thinks improving fidelity will attract willing investors when funding is needed, making the company a viable acquisition target.
Bolton applauded management's frankness about the new technological and operational strategies and believes these are necessary steps for the long run.
The stock is trading at ~1/2 net cash levels.
Price Action: RGTI shares traded higher by 4.36% at $0.57 on the last check Tuesday.

Analyst Calendar