Wall Street Bulls Look Optimistic About Rigetti Computing (RGTI): Should You Buy?

Core Viewpoint - The article discusses the reliability of Wall Street analysts' recommendations, particularly focusing on Rigetti Computing, Inc. (RGTI), and emphasizes the importance of using these recommendations in conjunction with other research tools like Zacks Rank. Group 1: Brokerage Recommendations - Rigetti Computing has an average brokerage recommendation (ABR) of 1.20, indicating a consensus between Strong Buy and Buy, with 80% of recommendations being Strong Buy and 20% being Buy [2] - Despite the positive ABR, relying solely on this information for investment decisions may not be wise, as studies show limited success of brokerage recommendations in predicting stock price increases [3] Group 2: Analyst Bias and Limitations - Analysts from brokerage firms tend to exhibit a strong positive bias in their ratings, often issuing five "Strong Buy" recommendations for every "Strong Sell" [4] - The interests of brokerage firms may not align with those of retail investors, leading to misleading recommendations regarding stock price movements [5][8] Group 3: Zacks Rank as an Alternative - Zacks Rank categorizes stocks into five groups based on earnings estimate revisions, providing a more effective indicator of near-term stock price performance compared to ABR [6][9] - The Zacks Rank is updated more frequently than ABR, reflecting timely changes in earnings estimates, which are crucial for predicting future stock prices [10] Group 4: Current Earnings Estimates for RGTI - The Zacks Consensus Estimate for Rigetti Computing remains unchanged at -$0.34, suggesting analysts have steady views on the company's earnings prospects [11] - The unchanged consensus estimate has resulted in a Zacks Rank of 3 (Hold) for Rigetti Computing, indicating caution despite the Buy-equivalent ABR [12]