Rapid7 (RPD) AI Stock Analysis

• Market Cap: $403.27M
• Dividend Yield: N/A
• Average Volume (3M): 1.65M
• Price to Earnings (P/E): 17.4
• Beta (1Y): 1.10
• Revenue Growth: 3.08%
• EPS Growth: -54.07%
• Country: US
• Employees: 2,413
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.44
• Shares Outstanding: 65,893,110
• 10 Day Avg. Volume: 1,802,146
• 30 Day Avg. Volume: 1,651,110
• PEG Ratio: -3.45
• Price to Book (P/B): 6.36
• Price to Sales (P/S): 1.14
• P/FCF Ratio: 6.81
• Enterprise Value/Market Cap: 2.95
• Enterprise Value/Revenue: 1.38
• Enterprise Value/Gross Profit: 1.97
• Enterprise Value/Ebitda: 13.82
• 1Y Price Target: $9.89
• Price Target Upside: 54.77% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 21
• EPS Forecast (FY): 1.55
• Revenue Forecast (FY): $838.73M

• Rating: 49 Neutral
• Price Target: $6.00 ▼(-6.10% Downside)
• Action: Reiterated Date: 02/11/26
• Date: Action: Reiterated 02/11/26

The score is held back primarily by weak technicals (price far below key moving averages and negative MACD) and elevated balance-sheet risk from high leverage. Earnings-call guidance also weighs on the outlook (expected FY2026 revenue decline and limited ARR visibility). Offsetting these are improving profitability and solid recent free cash flow generation.

Positive Factors

Recurring ARR and customer base

A near-$840M ARR base and 11,500 customers underpin durable subscription revenues and high retention potential. This scale supports predictable recurring cash flows, cross-sell opportunities, and resilience to churn, enabling multi-year planning and gradual expansion of wallet share with existing accounts.

Strong free cash flow

Consistent positive free cash flow and cash/securities (~$659M) materially strengthen operational funding capacity. Reliable FCF supports debt servicing, targeted R&D and partnerships, and provides a buffer for execution risk, improving long-term financial flexibility despite leverage concerns.

Strategic AI & partner wins

Targeted AI investments and Microsoft-focused MDR integrations deepen ecosystem ties and product differentiation. Strategic partnerships and expanded vendor-agnostic MDR increase go-to-market reach, accelerate managed services adoption, and position Rapid7 to capture secular demand for outsourced, AI-driven security operations.

Negative Factors

High leverage / weak equity

A leveraged capital structure and historically negative or small equity reduce financial flexibility and raise refinancing risk. High debt limits ability to absorb slower top-line growth, increases interest/capital servicing needs, and constrains capacity for opportunistic M&A or larger invest-to-grow initiatives.

Flat ARR and slowing revenue

Stagnant ARR and guidance calling for modest revenue contraction signal weakening demand or sales conversion issues. Slower ARR compounding undermines long-term growth leverage, pressures ability to expand margins sustainably, and raises the bar for successful execution of cross-sell and product expansion plans.

Execution and visibility risks

No full-year ARR guidance, sales leadership changes, and slower exposure-management rollout indicate execution risk. Organizational transitions and sales productivity shortfalls can delay revenue realization, weaken pipeline conversion, and create sustained uncertainty about when strategic investments will translate into consistent growth.

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 services, which include its cloud-based security solutions such as InsightVM for vulnerability management, InsightIDR for incident detection and response, and InsightAppSec for application security testing. The company also offers professional services, such as consulting and training, which contribute to its earnings. Key revenue streams include annual recurring revenue (ARR) from software subscriptions and one-time fees from professional services. Rapid7 has established partnerships with various technology vendors and resellers, enhancing its market reach and driving additional sales through integrated solutions and joint marketing efforts.

Rapid7 Financial Statement Overview

Summary

Income statement and cash flow are improving (strong gross margins, profitability turnaround, and positive recent free cash flow), but the balance sheet is a major offset with high leverage and historically thin/negative equity, increasing financial risk.

Income Statement

Revenue growth is strong across the period, with 2024 up ~9% year-over-year and margins holding consistently high at ~70% gross margin. Profitability has improved meaningfully versus 2020–2023 losses, turning positive in 2024 and remaining positive in TTM (Trailing-Twelve-Months), but net margins are still modest (low-single-digits), indicating the business is profitable yet not highly efficient at the bottom line. Overall: solid top-line and gross profitability, with improving (but still thin) net profitability.

Balance Sheet

Leverage is the key concern: debt is high relative to equity, with very elevated debt-to-equity in 2024 and still high in TTM (Trailing-Twelve-Months). Equity was negative in 2021–2023 and remains relatively small versus the debt load, which reduces financial flexibility. While returns on equity appear high in the most recent periods, the capital structure (high leverage and previously negative equity) makes the balance sheet riskier than typical for the sector.

Cash Flow

Cash generation is a relative bright spot: operating cash flow and free cash flow are positive in recent years, and free cash flow closely tracks reported earnings (near 1x in 2023–2024 and TTM), suggesting earnings quality is reasonably supported by cash. Earlier years were weaker (including negative free cash flow in 2020), and the ability of operating cash flow to cover obligations remains only moderate based on the provided coverage ratio. Overall: improving and generally solid cash conversion, but not without coverage/consistency risk.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	859.79M	844.01M	777.71M	685.08M	535.40M
Gross Profit	603.15M	592.97M	545.97M	470.73M	366.46M
EBITDA	86.05M	97.31M	-39.14M	-70.28M	-88.12M
Net Income	23.38M	25.53M	-149.26M	-124.72M	-146.33M
Balance Sheet
Total Assets	1.73B	1.65B	1.51B	1.36B	1.30B
Cash, Cash Equivalents and Short-Term Investments	474.67M	521.71M	383.17M	291.45M	223.43M
Total Debt	1.03B	1.02B	1.02B	914.34M	912.56M
Total Liabilities	1.57B	1.63B	1.62B	1.48B	1.42B
Stockholders Equity	154.73M	17.71M	-118.18M	-120.07M	-126.00M
Cash Flow
Free Cash Flow	144.53M	168.25M	99.91M	57.82M	44.91M
Operating Cash Flow	152.13M	171.67M	104.28M	78.20M	53.92M
Investing Cash Flow	-209.44M	-46.52M	-178.75M	-39.99M	-325.38M
Financing Cash Flow	-43.81M	5.58M	79.60M	7.42M	264.13M

Rapid7 Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.39
• 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 6.39 is below the 20-day moving average (MA) of 8.70, below the 50-day MA of 12.03, and below the 200-day MA of 18.10, indicating a bearish trend. The MACD of -1.79 indicates Positive momentum. The RSI at 18.64 is Positive, neither overbought nor oversold. The STOCH value of 19.97 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	73 Outperform	$3.10B	16.76	38.20%	―	9.95%	12.72%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
OKTA	60 Neutral	$12.61B	67.03	2.96%	―	12.12%	―
VRNS	54 Neutral	$2.55B	-20.05	-24.53%	―	11.37%	-34.44%
RBRK	51 Neutral	$10.22B	-26.64	―	―	48.93%	69.39%
RPD	49 Neutral	$403.27M	17.44	27.12%	―	3.08%	-54.07%

Rapid7 Corporate Events

Rapid7 Prioritizes Profitability Amid Slower 2026 Growth Outlook

Rapid7 on February 5, 2026 disclosed that long‑time director Michael Berry will not stand for re‑election at the 2026 annual meeting, ending more than 13 years of board service, with the company emphasizing that his departure does not stem from any disagreement over its operations or governance. The move marks a governance transition but is not expected to disrupt strategic direction, as the board publicly thanked Berry for his contributions.

On February 10, 2026 the cybersecurity firm reported full‑year 2025 revenue of $860 million, up 2% year‑on‑year, annualized recurring revenue of $840 million that was flat, and GAAP net income of $23.4 million alongside strong free cash flow of $130.1 million, underscoring a pivot toward profitability despite modest top‑line growth. Rapid7 highlighted its AI‑driven security operations, 11,500‑plus customers, and a string of late‑2025 partnerships and product launches as reinforcing its competitive position, even as 2026 guidance points to slightly declining revenue and ARR, signaling a focus on efficiency and margin expansion over rapid expansion.

Recent initiatives including new Microsoft‑focused managed detection and response services, cloud and compliance partnerships, and recognition as a leader in Gartner’s 2025 Magic Quadrant for exposure assessment platforms suggest Rapid7 is deepening its presence in key security ecosystems. The accumulation of more than 300 cybersecurity patents, many in advanced AI and machine learning, further supports its strategy to differentiate on technology while tightening operational discipline, a combination that will be closely watched by customers and investors amid a slower growth outlook.

The most recent analyst rating on (RPD) stock is a Hold with a $10.50 price target. To see the full list of analyst forecasts on Rapid7 stock, see the RPD Stock Forecast page.