Rigetti Computing: Be Wary Of The Overhyped Catalyst (Archive)

This 5-Minute Pitch was originally published on Seeking Alpha before the launch of the Hunting Alphas website. It is shared here to showcase my previous work and track record. New 5-Minute Pitches published on this site will not be disseminated anywhere else.

Elevator Pitch

• Rigetti Computing is unlikely to benefit materially from the $2.7 billion funding from the National Quantum Initiative, which seems to be the catalyst for the stock's sharp rise up recently.
• RGTI management has a patchy record in revenue and margins execution vs consensus expectations.
• At current quarterly FCF burn levels, the unprofitable Rigetti Computing has enough liquidity to last just over 2.5 years, due to a recent $100 million equity raise.
• RGTI's valuation drivers suggest the stock is in an unreasonable hype mode, as forward revenue estimates remain unchanged despite the stocks' sharp climb up.
• Technicals show strong bullish momentum but is nearing a major resistance area. Overall, I believe it is wise to steer clear of RGTI, but also not to be bearish on it as the market's bullish momentum is hard to fight.

Read the full article here.