Rapid7 Inc. (RPD)
NASDAQ:RPD
Want to see RPD full AI Analyst Report?
Top Page
Rapid7
(NASDAQ:RPD)
Select Model
Select Model
Rating:55Neutral
Price Target:
$6.50
▲(14.44% Upside)
Action:Reiterated
Date:05/09/26
The score is driven by strong cash generation and improved profitability (plus raised FY26 profit/FCF outlook), partially offset by high leverage and weakening/declining revenue and ARR trends. Technicals are improving short term but remain weak versus longer-term averages, while valuation is a headwind due to the elevated P/E and lack of dividend support.
Positive Factors
Strong cash generation
Rapid7's subscription-heavy model converts to durable cash flow: TTM operating cash flow and FCF near $160M and $151M respectively, with FCF roughly tracking reported earnings. This level of cash generation supports reinvestment, acquisition funding, and gradual deleveraging even if growth is modest.
Negative Factors
High leverage
Elevated leverage materially increases refinancing and interest rate risk for a software company with modest operating margins. With nearly $1B of debt against a small equity base, cash flows must prioritize debt service, constraining strategic flexibility and amplifying downside if revenue or margins weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Rapid7's subscription-heavy model converts to durable cash flow: TTM operating cash flow and FCF near $160M and $151M respectively, with FCF roughly tracking reported earnings. This level of cash generation supports reinvestment, acquisition funding, and gradual deleveraging even if growth is modest.
Read all positive factors
Rapid7 Key Performance Indicators (KPIs)
Any
Revenue by Geography
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Breaks down revenue across different regions, revealing where the company is strongest and where it may face risk or growth potential due to local economic conditions or market share shifts.
Data provided by:
The Fly
The FlyRapid7 (RPD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$485.86M
Dividend YieldN/A
Average Volume (3M)2.16M
Price to Earnings (P/E)80.7
Beta (1Y)1.24
Revenue Growth1.19%
EPS Growth-25.24%
CountryUS
Employees2,413
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.34
Shares Outstanding66,830,620
10 Day Avg. Volume1,955,930
30 Day Avg. Volume2,156,053
Financial Highlights & Ratios
PEG Ratio-3.45
Price to Book (P/B)6.36
Price to Sales (P/S)1.14
P/FCF Ratio6.81
Enterprise Value/Market Cap2.28
Enterprise Value/Revenue1.29
Enterprise Value/Gross Profit1.85
Enterprise Value/Ebitda13.43
Forecast
1Y Price Target
$7.15Price Target Upside25.88% Upside
Rating ConsensusHold
Number of Analyst Covering19
EPS Forecast (FY)1.56
Revenue Forecast (FY)$838.63M
Rapid7 Business Overview & Revenue Model
Company Description
Rapid7, Inc. provides cyber security solutions. The company offers a cloud-native insight platform that enables customers to create and manage analytics-driven cyber security risk management programs. Its platform includes InsightIDR, an incident ...
How the Company Makes Money
Rapid7 primarily makes money by selling subscriptions to its cybersecurity software and cloud services. Revenue is largely generated from recurring subscription contracts for access to its security platforms and modules (e.g., capabilities for vul...
Rapid7 Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call presents a mixed but constructive picture: Rapid7 reported a large ARR base with clear strength in its core DNR business (7% ARR growth) and beat profitability and cashflow guidance, while investing to capture AI-driven opportunities (acquisition and product releases). Offsetting these positives are near-term headwinds from declining standalone non-platform products, modest overall revenue declines, gross margin pressure from SOC staffing, and incomplete integration/upgrade cycles for exposure management. Management communicated confidence in margin expansion and a focused platform strategy, but several recovery and integration items remain to be proven out across the rest of 2026.Positive Updates
Large ARR Base with Modest Core Growth
Total ARR of $832 million at quarter end; core platform solutions (detection & response and exposure management) now represent >80% of ARR and grew ~2% year-over-year, with detection & response (DNR) comprising ~55% of ARR and growing ~7% year-over-year.
Negative Updates
Sequential ARR Declines Driven by Non-Core Products
Total ARR saw a sequential decline (Q1 down ~$8 million quarter-over-quarter) and management is guiding to ending Q2 ARR of ~ $820 million (another sequential decline of ~ $12 million), with declines concentrated in standalone non-platform (non-core) offerings.
Read all updates
Q1-2026 Updates
Positive
Negative
Large ARR Base with Modest Core Growth
Total ARR of $832 million at quarter end; core platform solutions (detection & response and exposure management) now represent >80% of ARR and grew ~2% year-over-year, with detection & response (DNR) comprising ~55% of ARR and growing ~7% year-over-year.
Read all positive updates
Company Guidance
Rapid7 guided Q2 ending ARR of approximately $820M, Q2 revenue of $207–209M (≈ -2.9% YoY at the midpoint), non‑GAAP operating income of $24–26M (≈12% margin at the midpoint) and non‑GAAP EPS of $0.33–0.36 on ~78.3M fully diluted shares, noting core platform (DNR + exposure) ARR is expected to be roughly flat sequentially while non‑core standalone ARR declines. For full‑year FY26 the company raised its outlook to revenue of $836–842M (≈ -2.4% YoY at the midpoint), non‑GAAP operating income $112–118M (≈13.7% operating margin at the midpoint), non‑GAAP EPS $1.52–1.60 on ~79.4M diluted shares, and free cash flow of $125–135M (flat YoY at the midpoint) implying ~15.5% FCF margin. For context, Q1 outperformed guidance with ARR $832M, revenue $209.7M, non‑GAAP operating income $24.4M (11.7% margin), non‑GAAP EPS $0.36, FCF $33.4M, cash & short‑term investments of $670M, a $200M undrawn revolver, >11,500 customers and average ARR per customer of ≈$72k.Rapid7 Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
40
Negative
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 859.23M | 859.79M | 844.01M | 777.71M | 685.08M | 535.40M |
| Gross Profit | 598.92M | 604.75M | 592.97M | 545.97M | 470.73M | 366.46M |
| EBITDA | 82.47M | 86.05M | 97.31M | -39.14M | -70.28M | -88.12M |
| Net Income | 22.41M | 23.38M | 25.53M | -149.26M | -124.72M | -146.33M |
Balance Sheet | ||||||
| Total Assets | 1.72B | 1.73B | 1.65B | 1.51B | 1.36B | 1.30B |
| Cash, Cash Equivalents and Short-Term Investments | 670.26M | 474.67M | 521.71M | 383.17M | 291.45M | 223.43M |
| Total Debt | 965.19M | 1.03B | 1.02B | 1.02B | 914.34M | 912.56M |
| Total Liabilities | 1.54B | 1.57B | 1.63B | 1.62B | 1.48B | 1.42B |
| Stockholders Equity | 174.77M | 154.73M | 17.71M | -118.18M | -120.07M | -126.00M |
Cash Flow | ||||||
| Free Cash Flow | 150.85M | 144.53M | 168.25M | 99.91M | 57.82M | 44.91M |
| Operating Cash Flow | 163.48M | 152.13M | 171.67M | 104.28M | 78.20M | 53.92M |
| Investing Cash Flow | -74.97M | -209.44M | -46.52M | -178.75M | -39.99M | -325.38M |
| Financing Cash Flow | -47.20M | -43.81M | 5.58M | 79.60M | 7.42M | 264.13M |
Rapid7 Technical Analysis
Neutral
5.68
Price Trends
6.08
Positive
8.18
Negative
13.02
Negative
Market Momentum
0.27
Negative
62.94
Neutral
89.47
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPD, the sentiment is Neutral. The current price of 5.68 is below the 20-day moving average (MA) of 6.52, below the 50-day MA of 6.08, and below the 200-day MA of 13.02, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 62.94 is Neutral, neither overbought nor oversold. The STOCH value of 89.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RPD.
Rapid7 Risk Analysis
Rapid7 disclosed 52 risk factors in its most recent earnings report. Rapid7 reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rapid7 Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $3.61B | 15.44 | 37.15% | ― | 10.21% | 13.31% | |
70 Outperform | $16.17B | 59.44 | 3.45% | ― | 11.84% | 730.76% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
57 Neutral | $3.56B | -16.86 | -26.10% | ― | 15.27% | -39.93% | |
55 Neutral | $485.86M | 80.67 | 16.38% | ― | 1.19% | -25.24% | |
54 Neutral | $13.70B | -31.51 | 64.45% | ― | 48.46% | 72.42% |
* Technology Sector Average
RPD
Rapid7
7.27
-15.69
-68.34%
QLYS
Qualys
102.37
-32.14
-23.89%
VRNS
Varonis Systems
31.00
-15.82
-33.79%
OKTA
Okta
92.24
-31.48
-25.44%
RBRK
Rubrik, Inc. Class A
66.59
-28.26
-29.79%
Rapid7 Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Rapid7 Reaches Board Nomination Agreement With JANA Partners
Neutral
Mar 31, 2026
On March 26, 2026, Rapid7, Inc. entered into a Nomination and Support Agreement with activist investor JANA Partners Management, LP under which the company will add JANA’s nominee, Kevin Galligan, to its slate of recommended directors for el...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.