Robert W. Baird analyst Shrenik Kothari has maintained their neutral stance on RPD stock, giving a Hold rating on August 4.
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Shrenik Kothari has given his Hold rating due to a combination of factors impacting Rapid7’s current financial landscape. The company reported a better-than-expected second quarter with revenue and annual recurring revenue (ARR) slightly exceeding guidance, despite challenges in its vulnerability management (VM) segment. This was offset by growth in the Security Transformation ARR and steady customer retention rates, which provided some balance to the overall performance.
However, Kothari noted that while there are positive developments such as increased adoption of Cloud SIEM, XDR, and MDR, and a growing customer base, the near-term growth is constrained by VM headwinds. Additionally, the company’s valuation is at a low level, and the macroeconomic environment is causing elongated deal cycles and customer spending scrutiny, particularly in the North American mid-market. These factors contribute to a balanced risk/reward scenario, justifying the Hold rating.
In another report released on August 4, J.P. Morgan also maintained a Hold rating on the stock with a $23.00 price target.