Rapid7 (RPD) AI Stock Analysis

• Market Cap: $922.63M
• Dividend Yield: N/A
• Average Volume (3M): 937.14K
• Price to Earnings (P/E): 41.6
• Beta (1Y): 0.93
• Revenue Growth: 3.08%
• EPS Growth: -54.07%
• Country: US
• Employees: 2,413
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.57
• Shares Outstanding: 64,745,950
• 10 Day Avg. Volume: 1,092,289
• 30 Day Avg. Volume: 937,142
• PEG Ratio: -0.85
• Price to Book (P/B): 142.21
• Price to Sales (P/S): 2.98
• P/FCF Ratio: 14.97
• Enterprise Value/Market Cap: 1.94
• Enterprise Value/Revenue: 2.08
• Enterprise Value/Gross Profit: 2.96
• Enterprise Value/Ebitda: 21.56
• 1Y Price Target: $20.27
• Price Target Upside: 42.75% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19
• EPS Forecast (FY): 1.98
• Revenue Forecast (FY): $858.20M

• Rating: 48 Neutral
• Price Target: $14.00 ▼(-1.41% Downside)

Rapid7's overall stock score is primarily influenced by its financial performance and technical analysis. While the company shows strong revenue growth, high leverage and low profitability pose significant risks. Technical indicators suggest bearish momentum, further impacting the score. The valuation is high relative to earnings, and the cautious outlook from the earnings call adds to the challenges.

Positive Factors

Revenue Growth

Rapid7's robust revenue growth indicates strong demand for its cybersecurity solutions, positioning the company well for continued market expansion.

Strategic Partnerships

The partnership with Microsoft strengthens Rapid7's competitive position by integrating its SOC expertise with Microsoft's ecosystem, enhancing product offerings.

Cash Flow Management

Strong free cash flow generation reflects effective cash management, providing financial flexibility for growth investments and debt servicing.

Negative Factors

High Debt Levels

High leverage poses financial risks, potentially limiting the company's ability to invest in growth and increasing vulnerability to interest rate hikes.

ARR Growth Challenges

Slower ARR growth indicates challenges in maintaining customer acquisition and retention, potentially impacting long-term revenue stability.

Leadership Transitions

Leadership changes can lead to strategic shifts and operational disruptions, affecting the company's ability to execute its long-term vision effectively.

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 detection and response solution; InsightCloudSec, a solution that integrates posture management, workload protection, infrastructure entitlements management, infrastructure-as-code security, and Kubernetes protection; InsightVM, a vulnerability risk management solution that is designed to provide a way to collect vulnerability data, prioritize risk, and automate remediation; InsightAppSec, which provides application security testing that analyzes web applications for security vulnerabilities; and InsightConnect, a security orchestration and automation response solution that is used by security professionals. The company's other products include DivvyCloud, a cloud security posture management solution; Nexpose, an on-premises version of company's vulnerability risk management solution; AppSpider, an on-premises version of company's application security testing solution; and Metasploit, a penetration testing software solution, as well as professional services. It offers its products through term or perpetual software licenses, cloud-based subscriptions, and managed services. The company serves customers in a range of industries, including technology, energy, financial services, healthcare and life sciences, manufacturing, media and entertainment, retail, education, real estate, transportation, government, and professional services industries through sales teams, and indirect channel partner relationships, as well as directly in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was incorporated in 2000 and is headquartered in Boston, Massachusetts.

How the Company Makes Money

Rapid7 generates revenue primarily through subscription-based models for its software solutions, which include its Insight platform and associated services. The company offers tiered pricing plans that cater to businesses of different sizes, driving consistent recurring revenue. Key revenue streams include subscription fees from its cloud-based services, professional services such as consulting and training, and maintenance and support for its products. Additionally, Rapid7 has formed significant partnerships with other technology firms and integrates its products with various third-party applications, enhancing its value proposition and customer reach, which further contributes to its overall earnings.

Rapid7 Financial Statement Overview

Summary

Rapid7 shows strong revenue growth and a healthy gross profit margin, indicating a solid market position. However, profitability remains a challenge with low net profit margins. The balance sheet shows high leverage, posing financial risks, while cash flow generation is moderate with limited flexibility.

Income Statement

Rapid7 has shown strong revenue growth with a TTM growth rate of 38.7%, indicating a robust upward trajectory. The gross profit margin remains healthy at 70.5%, reflecting efficient cost management. However, the net profit margin is relatively low at 2.2%, suggesting limited profitability. The EBIT and EBITDA margins have improved but remain modest, indicating room for operational efficiency improvements.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 7.63, indicating significant leverage and potential financial risk. The return on equity is strong at 66%, driven by improved net income, but the equity ratio is low, reflecting a reliance on debt financing. Overall, the balance sheet shows financial risk due to high leverage.

Cash Flow

Operating cash flow has improved, with a TTM operating cash flow to net income ratio of 0.34, showing better cash generation relative to earnings. However, free cash flow growth is negative, and the free cash flow to net income ratio is close to 1, indicating limited cash flow flexibility. The cash flow statement suggests moderate cash generation capabilities with some constraints.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	858.67M	844.01M	777.71M	685.08M	535.40M	411.49M
Gross Profit	602.89M	592.97M	545.97M	470.73M	366.46M	289.97M
EBITDA	82.83M	97.31M	-39.14M	-70.28M	-88.12M	-50.09M
Net Income	18.77M	25.53M	-149.26M	-124.72M	-146.33M	-98.85M
Balance Sheet
Total Assets	1.67B	1.65B	1.51B	1.36B	1.30B	913.12M
Cash, Cash Equivalents and Short-Term Investments	407.13M	521.71M	383.17M	291.45M	223.43M	312.46M
Total Debt	970.78M	1.02B	1.02B	914.34M	912.56M	463.94M
Total Liabilities	1.54B	1.63B	1.62B	1.48B	1.42B	841.59M
Stockholders Equity	127.22M	17.71M	-118.18M	-120.07M	-126.00M	71.54M
Cash Flow
Free Cash Flow	172.39M	168.25M	84.03M	40.68M	35.05M	-15.04M
Operating Cash Flow	180.02M	171.67M	104.28M	78.20M	53.92M	4.89M
Investing Cash Flow	-239.22M	-46.52M	-178.75M	-39.99M	-325.38M	-156.29M
Financing Cash Flow	-42.05M	5.58M	79.60M	7.42M	264.13M	200.93M

Rapid7 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 14.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPD, the sentiment is Negative. The current price of 14.2 is below the 20-day moving average (MA) of 17.95, below the 50-day MA of 18.90, and below the 200-day MA of 24.09, indicating a bearish trend. The MACD of -0.99 indicates Positive momentum. The RSI at 23.20 is Positive, neither overbought nor oversold. The STOCH value of 3.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RPD.

Rapid7 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	77 Outperform	$5.27B	29.00	38.64%	―	9.95%	12.72%
CYBR	63 Neutral	$25.36B	―	-12.73%	―	43.26%	-1651.82%
OKTA	63 Neutral	$15.14B	100.47	2.61%	―	12.68%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
RPD	48 Neutral	$922.63M	41.61	37.09%	―	3.08%	-54.07%
VRNS	44 Neutral	$4.13B	―	-22.17%	―	11.37%	-34.44%
RBRK	41 Neutral	$14.12B	―	―	―	47.72%	61.95%

Rapid7 Corporate Events

Rapid7’s Earnings Call: Strong Gains Amid Challenges

Rapid7’s Earnings Call Reflects Strong Performance Amid Challenges

Rapid7 Inc. Reports Modest Growth in Q3 2025

Rapid7 Inc., a prominent player in the cybersecurity sector, specializes in threat detection and exposure management, providing integrated security solutions to over 11,000 global customers.

Rapid7 Appoints Rafe Brown as New CFO

Rapid7 announced the appointment of Rafe Brown as its new Chief Financial Officer, effective December 1, 2025, succeeding Tim Adams who will retire but remain in an advisory role during the transition. This leadership change comes as Rapid7 reported its third-quarter 2025 financial results, highlighting a 2% year-over-year increase in both annualized recurring revenue and total revenue, with the company positioning itself to leverage growing demand in the security operations market.

The most recent analyst rating on (RPD) stock is a Hold with a $19.50 price target. To see the full list of analyst forecasts on Rapid7 stock, see the RPD Stock Forecast page.

Rapid7 Q2 Earnings Call: Balanced Growth Amid Challenges

The recent earnings call for Rapid7 Inc. presented a balanced sentiment, highlighting robust performance in ARR and free cash flow, while acknowledging challenges like customer spending scrutiny and extended deal cycles. The detection and response segment continues to show healthy growth, but a narrowed ARR guidance reflects cautious optimism.

Rapid7 Reports Steady Growth in Q2 2025 Earnings

Rapid7 Inc., a prominent player in the cybersecurity industry, specializes in threat detection and exposure management, providing integrated solutions to enhance security outcomes for over 11,000 global customers. The company, headquartered in Boston, MA, recently released its financial results for the second quarter of 2025, showcasing steady growth in its annualized recurring revenue (ARR) and total revenue.