BTIG analyst Gray Powell has maintained their neutral stance on RPD stock, giving a Hold rating today.
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Gray Powell’s rating is based on several factors, including Rapid7’s disappointing third-quarter performance and revised guidance. The company reported lower-than-expected annual recurring revenue (ARR) for Q3, missing both BTIG’s and the Street’s estimates, and reduced its full-year guidance for the third consecutive quarter. This downward revision reflects a lack of growth, with ARR expected to remain flat sequentially, indicating a challenging outlook for the company.
Despite these setbacks, Rapid7’s Detection and Response business shows promise, growing at a double-digit pace and accounting for over half of the company’s ARR. However, the overall growth prospects remain limited, and the valuation, while seemingly attractive at 8.0x EV/FCF, does not offset the near-term growth challenges. Consequently, Gray Powell maintains a Hold rating, reflecting a balanced risk-reward scenario given the current market conditions.
Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is neutral on the stock.