Rigetti Computing Is Worth $6 Billion. It Booked $13 Million of Revenue Over the Past Year.

Rigetti Computing (NASDAQ: RGTI) 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?

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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.

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.

Daniel Sparks and his clients do not have positions in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.