Robert W. Baird analyst Shrenik Kothari has maintained their neutral stance on RPD stock, giving a Hold rating yesterday.
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Shrenik Kothari has given his Hold rating due to a combination of factors influencing Rapid7’s performance. The company reported mixed results for Q1, with revenue and EPS exceeding expectations, but ARR growth fell short, leading to a downward revision in guidance for ARR and total revenue. This was attributed to extended sales cycles and macroeconomic challenges affecting the mid-market segment, which have hindered near-term visibility.
Despite resilience in the Detection & Response segment, the Risk & Exposure Management business faced challenges, particularly in transitioning from VM to Exposure Command. The valuation of Rapid7 is deemed fair at approximately 2.4x EV/CY26E sales, but potential upside is limited in the short term due to macroeconomic and execution risks. Management anticipates gradual stabilization rather than a quick recovery, suggesting that significant reacceleration may not occur until FY26.
In another report released yesterday, Barclays also maintained a Hold rating on the stock with a $26.00 price target.