Needham analyst Matt Dezort has maintained their neutral stance on RPD stock, giving a Hold rating today.
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Matt Dezort’s rating is based on a combination of factors related to Rapid7’s recent performance and outlook. The company reported a mixed fourth quarter, with their guidance for the upcoming fiscal year falling short of expectations, except for their Annual Recurring Revenue (ARR). Despite ARR growing by 4% year-over-year, this was in line with consensus expectations, and the company’s outlook suggests a significant acceleration in the second half of the year, which carries some uncertainty.
Furthermore, while the Exposure Management pipeline showed over 20% growth year-over-year, its contribution to ARR guidance remains modest, with expected growth of 4% to 6%. Additionally, the operating margin outlook for the coming fiscal year is notably below street expectations, influenced by planned investments in research and development and sales and marketing. The anticipation of FedRAMP High in the coming fiscal year presents potential for upside, but until there is clearer visibility on accelerating growth, Matt Dezort has opted for a Hold rating.
Dezort covers the Technology sector, focusing on stocks such as Fortinet, Varonis Systems, and CyberArk Software. According to TipRanks, Dezort has an average return of 13.4% and a 60.00% success rate on recommended stocks.