Reviewing Rigetti Computing (NASDAQ:RGTI) and Zscaler (NASDAQ:ZS)

Rigetti Computing (NASDAQ:RGTI) and Zscaler (NASDAQ:ZS) are both computer and technology companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.

Insider and Institutional Ownership

35.4% of Rigetti Computing shares are held by institutional investors. Comparatively, 46.5% of Zscaler shares are held by institutional investors. 1.9% of Rigetti Computing shares are held by company insiders. Comparatively, 18.1% of Zscaler shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Rigetti Computing and Zscaler, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rigetti Computing	0	0	5	0	3.00
Zscaler	0	9	27	1	2.78

Rigetti Computing currently has a consensus target price of $14.00, indicating a potential upside of 11.82%. Zscaler has a consensus target price of $288.71, indicating a potential downside of 3.72%. Given Rigetti Computing’s stronger consensus rating and higher possible upside, research analysts plainly believe Rigetti Computing is more favorable than Zscaler.

Profitability

This table compares Rigetti Computing and Zscaler’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Rigetti Computing	-509.58%	-51.56%	-37.78%
Zscaler	-1.58%	-0.75%	-0.20%

Volatility & Risk

Rigetti Computing has a beta of 1.5, suggesting that its stock price is 50% more volatile than the S&P 500. Comparatively, Zscaler has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500.

Earnings & Valuation

This table compares Rigetti Computing and Zscaler”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rigetti Computing	$9.21 million	394.66	-$75.11 million	($0.70)	-17.89
Zscaler	$2.55 billion	18.33	-$57.71 million	($0.26)	-1,153.31

Zscaler has higher revenue and earnings than Rigetti Computing. Zscaler is trading at a lower price-to-earnings ratio than Rigetti Computing, indicating that it is currently the more affordable of the two stocks.

Summary

Zscaler beats Rigetti Computing on 10 of the 15 factors compared between the two stocks.

About Rigetti Computing

Rigetti Computing, Inc., through its subsidiaries, builds quantum computers and the superconducting quantum processors. The company offers cloud in a form of quantum processing unit, such as 9-qubit chip and Ankaa-2 system under the Novera brand name; and sells access to its quantum computers through quantum computing as a service. It also provides quantum cloud services that provides various range of support in programming, public or private clouds integration, and connectivity, as well as quantum operating system software that supports both public and private cloud architectures. In addition, the company offers professional services, such as algorithm development, benchmarking, quantum application programming, and software development. The company serves commercial enterprises, government organizations, and international government entities. It has operations in the United States and the United Kingdom. Rigetti Computing, Inc. was founded in 2013 and is headquartered in Berkeley, California.

About Zscaler

Zscaler, Inc. operates as a cloud security company worldwide. The company offers Zscaler Internet Access solution that provides users, workloads, IoT, and OT devices secure access to externally managed applications, including software-as-a-service (SaaS) applications and internet destinations; and Zscaler Private Access solution, which is designed to provide access to managed applications hosted internally in data centers, and private or public clouds. It also provides Zscaler Digital Experience that measures end-to-end user experience across business applications, as well as provides an easy-to-understand digital experience score for each user, application, and location within an enterprise. In addition, the company offers Posture Control solutions comprising Cloud Security Posture Management that identifies and remediates application misconfigurations in SaaS, infrastructure as a service, and PaaS to reduce risk and ensure compliance with industry and organizational benchmarks; Cloud Infrastructure Entitlement Management that detects and remediates excessive or unused cloud permissions and enforces least privileged access without disrupting productivity; Infrastructure as Code (IaC), which analyzes IaC templates to identify misconfigurations and other security issues prior to deployment to cloud infrastructure; and Vulnerability Scanning and Data Loss Prevention solutions. Its platform modules include Zscaler Central Authority, Zscaler Enforcement Node, and Zscaler Log Servers. The company serves customers in airlines and transportation, conglomerates, consumer goods and retail, financial services, healthcare, manufacturing, media and communications, public sector and education, technology, and telecommunications services industries. The company was formerly known as SafeChannel, Inc., and changed its name to Zscaler, Inc. in August 2008. Zscaler, Inc. was incorporated in 2007 and is headquartered in San Jose, California.