Rigetti Computing (RGTI Quick QuoteRGTI - Free Report) currently trades at a price-to-book (P/B) ratio of 17.07X, significantly above the Zacks Internet Software industry average of 6.55X. This elevated valuation is also supported by the RGTI’s Value Score of F. While this premium reflects investor optimism about Rigetti’s potential in the emerging quantum computing space, it also positions the stock ahead of many of its peers.

International Business Machines (IBM Quick QuoteIBM - Free Report) , a diversified technology leader with substantial quantum R&D, holds a P/B ratio of 9.78X. More direct quantum peers such as IonQ (IONQ Quick QuoteIONQ - Free Report) , which trades at a P/B ratio of 14.3X and D-Wave Quantum (QBTS Quick QuoteQBTS - Free Report) , with a ratio of 20.9X, are also trading at elevated multiples, underscoring a broader trend of high valuation across the early-stage quantum ecosystem. In this light, RGTI’s valuation suggests the market is placing a considerable premium on the company’s technical roadmap and long-term commercialization prospects.

This divergence from industry norms may be driven by Rigetti’s differentiated offering—such as pulse-level control capabilities and proprietary superconducting architecture—which appeals to investors looking for cutting-edge innovation. However, with commercialization still in early stages and financial metrics like revenue and margins yet to scale meaningfully, such valuations highlight a strong degree of forward-looking confidence.

Whether this optimism will be validated through sustained growth and ecosystem relevance remains to be seen, making RGTI a stock to watch closely for execution in the quarters ahead.

RGTI's Price to Book Ratio

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A Roadmap That May Justify the Premium

Rigetti’s elevated valuation may, in part, be grounded in its ambitious and well-defined technical roadmap. The company is set to launch a 36-qubit multi-chip module, constructed by tiling four 9-qubit chips, an important milestone toward scalable modular quantum systems. The launch is likely to be followed by a 100+ qubit system by the end of 2025, maintaining a targeted median two-qubit gate fidelity of 99.5%. These developments lay the groundwork for Lyra, a 336-qubit processor expected in 2026, designed to demonstrate narrow quantum advantage. Beyond hardware, Rigetti is fostering a maturing ecosystem through partnerships with Qruise for AI-driven calibration, Riverlane for error correction, and Quanta for cloud infrastructure integration.

However, while the long-term vision is compelling, Rigetti’s current financial and operational profile raises questions about whether near-term fundamentals fully support the stock’s elevated valuation.

Assessing RGTI’s Valuation in the Context of Business Fundamentals

Valuation Outpaces Revenue, Hinges on Future Execution: Rigetti’s price-to-book ratio of 17.07 shows that investors are clearly betting on big things ahead. But with just $1.5 million in revenues reported for the first quarter of 2025, there’s a noticeable gap between current performance and market expectations. The optimism is largely tied to Rigetti’s ambitious roadmap and the promise of scalable quantum hardware, rather than near-term results. While that kind of forward-looking valuation isn’t unusual for early-stage tech, it does raise the stakes. To justify this premium over time, Rigetti will need to consistently hit milestones and translate technical progress into real commercial traction.

Limited Revenue Visibility Raises Questions: A significant portion of Rigetti’s revenue is derived from short-term, project-based contracts, often linked to government-sponsored research programs. While these engagements offer validation and funding support, they do not provide predictable, recurring income. As a result, the company lacks clear visibility into its future cash flows. For a stock commanding a premium valuation, this absence of a stable and diversified revenue stream could become a concern for investors seeking greater predictability and long-term value realization.

RGTI Shares Underperform Industry & Peers

Rigetti’s shares have underperformed the Zacks Internet - Software industry and its industry peers, which include IONQ, QBTS and IBM, in the year-to-date period.

RGTI stock has lost 20.2% in the year-to-date period. Shares of IBM and QBTS have significantly gained 29% and 76.3%, respectively. IONQ shares have traded flat during the same period. The broader sector has improved 7.4% over the same timeframe.

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RGTI’s Sales & EPS Growth

In 2025, Rigetti is expected to experience an 18.6% decline in revenues. On the profitability front, earnings per share are expected to remain negative, but with an improvement of 86.1% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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How to Play Rigetti’s Stock Now?

While Rigetti’s long-term roadmap and ecosystem strategy may offer a basis for its elevated valuation, the near-term fundamentals remain weak. Revenue is still modest, profitability is distant, and the company continues to rely on non-recurring government contracts. These factors, combined with execution risks, make it difficult to justify the current premium in the absence of measurable commercial traction.

With a Zacks Rank #4 (Sell), investors may want to stay on the sidelines until Rigetti demonstrates clear progress in translating its technical vision into sustained business performance.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.