Rigetti Computing (RGTI) shares opened more than 10% down on Tuesday after the quantum computing company reported disappointing revenue for its Q1. 

The company based out of Berkeley, California generated a total of $1.5 million in revenue in its first quarter – down 35% sequentially and an even bigger 51% on a year-over-year basis.

More importantly, RGTI missed the consensus for Q1 revenue that stood at a sharply higher $2.6 million. At the time of writing, Rigetti Computing stock is down 35% in the year to date. 

RGTI’s Unexpected Q1 EPS Is Not Impressive

For Q1, the quantum computing firm recorded a surprise profit of $0.13 a share on an adjusted basis. 

However, much of it was attributed to a one-time “$62.1 million of noncash gain from the change in fair value of derivative warrant and earn-out liabilities,” according to RGTI’s earnings release on Tuesday. 

Therefore, the headline first-quarter profit that Rigetti Computing reported this morning is not representative of its core business strength. 

Additionally, RGTI shares are currently going for an unusually high price-sales multiple of 236x, which further underscores the risk associated with owning this quantum stock, especially given the uncertain macroeconomic environment in 2025.  

Rigetti Computing Stock Faces Intense Competition

Investors are urged to practice caution in buying the post-earnings decline in Rigetti Computing stock also because “we’re four to five years away from quantum advantage,” its chief executive, Subodh Kulkarni, told analysts on the earnings call last night. 

Finally, the Nasdaq-listed firm faces intense competition from pure-plays like IonQ (IONQ) and D-Wave (QBTS) as well as from conventional tech behemoths, including Google (GOOGL) and International Business Machines (IBM) in 2025. 

This could make it incrementally more challenging for RGTI shares to fully capture the quantum technology market opportunity in the years ahead. 

Wall Street Is Still Positive on RGTI Shares for 2025

Despite challenges and a disappointing earnings report, however, Wall Street analysts are sticking to their bullish view on Rigetti Computing stock. 

The consensus rating on RGTI currently sits at “Strong Buy” with the mean target of nearly $15 indicating potential upside of about 45% from here.