Rigetti Computing (RGTI +1.55%) is valued at about $5.9 billion as of this writing. The revenue behind that price: $13.4 million over the past 12 months, alongside a net loss of about $239 million.
The gap tells you what buyers of the quantum computing specialist's stock are actually purchasing. It isn't today's business. Even at 30 times sales, a multiple reserved for the fastest-growing software companies, Rigetti's price implies about $200 million of annual revenue -- about 15 times what it booked over the past year.
So what has the company committed to, and when?
Image source: Motley Fool.
The disclosures and their dates
Rigetti's second-quarter report last week showed fast growth on a tiny base. Revenue nearly tripled year over year to $5.1 million (a base small enough that a single system sale can swing the rate), while the operating loss came in at $28.1 million.
The balance sheet is the sturdiest part of the story. Rigetti held $541 million in cash and investments at quarter's end, enough to fund years of losses at the current pace.
NASDAQ: RGTI
Key Data Points
The technology is making measurable progress. The company's flagship system, Cepheus-1-108Q, carries 108 qubits and currently runs at about 99.1% median two-qubit gate fidelity. Fidelity measures how often a quantum operation runs without error, and it is arguably the main thing standing between today's machines and commercially useful ones. Rigetti also holds a recently announced letter of intent with the U.S. Department of Commerce for up to $100 million in potential funding, which the company says could help it accelerate its superconducting quantum computing work.
A fidelity milestone, though, is an engineering achievement, and a letter of intent is potential funding. Neither puts commercial revenue anywhere near $200 million on a calendar.
Quantum computing could well produce that business eventually, and Rigetti's cash gives it years to try. But the company's own updates describe a research-stage operation on a research-stage timeline. What the $5.9 billion pays for comes after that, and none of the disclosures says when.
