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Rapid7 (RPD)
NASDAQ:RPD
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Rapid7
(NASDAQ:RPD)
Rating:58Neutral
Price Target:
$24.00
▲(6.52%Upside)
Positive Factors
Business Growth
Rapid7's detection and response business has grown to more than half of the company’s ARR and is growing in the mid-teens range.
International Market Expansion
Go-to-market investments in international markets yielded 10% growth in business outside of the US.
Product and Revenue Performance
Rapid7 made steady progress in its Q1 demonstrating solid upside on both product revenue and EBIT.
Negative Factors
Customer and Market Dynamics
Customer count declined quarter over quarter, and CRPOs were down, showing signs of weakening performance.
Financial Outlook
Incremental macroeconomic uncertainty ultimately led the company to lower and widen its FY25 ARR guidance.
Growth Challenges
The growth of Rapid7 Inc. is rapidly decelerating, with real risk that it could turn negative in the future.
Rapid7 (RPD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.47B
Dividend YieldN/A
Average Volume (3M)809.42K
Price to Earnings (P/E)57.3
Beta (1Y)1.03
Revenue Growth6.19%
EPS GrowthN/A
CountryUS
Employees2,413
SectorTechnology
Sector Strength86
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.49
Shares Outstanding64,239,296
10 Day Avg. Volume784,319
30 Day Avg. Volume809,420
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)27.48
Price to Sales (P/S)0.00
P/FCF Ratio9.19
Enterprise Value/Market Cap1.48
Enterprise Value/Revenue0.65
Enterprise Value/Gross Profit3.64
Enterprise Value/Ebitda6.79
Forecast
1Y Price Target
$30.07Price Target Upside33.47% Upside
Rating ConsensusHold
Number of Analyst Covering19
Rapid7 Business Overview & Revenue Model
Company DescriptionRapid7, Inc. is a leading provider of security data and analytics solutions. The company operates in the cybersecurity sector, offering a comprehensive suite of products and services designed to help organizations detect, manage, and remediate security threats and vulnerabilities. Rapid7's core offerings include its Insight platform, which provides cloud-based solutions for vulnerability management, incident detection and response, application security, and security orchestration and automation.
How the Company Makes MoneyRapid7 makes money primarily through the sale of subscriptions to its cloud-based security solutions, which are part of its Insight platform. Revenue is generated from subscription fees, which provide customers access to its software solutions, and from professional services, including consulting and training, that help organizations implement and optimize their security strategies. The company also benefits from strategic partnerships with other technology and cybersecurity firms, enhancing its market reach and capabilities. Additionally, Rapid7 provides maintenance and support services, which contribute to its recurring revenue stream.
Rapid7 Key Performance Indicators (KPIs)
Any
Annualized Recurring Revenue
Shows the total revenue expected from recurring sources over a year, highlighting the stability and predictability of the company’s income stream.
Shows the total revenue expected from recurring sources over a year, highlighting the stability and predictability of the company’s income stream.
Data provided by:
Main Street Data
Main Street DataRapid7 Earnings Call Summary
Earnings Call Date:May 12, 2025
(Q1-2025)
| % Change Since: -15.74%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture for Rapid7. While the company exceeded revenue and operating income expectations, driven by strong growth in the Detection and Response segment and international markets, it faced challenges with ARR growth and the Risk and Exposure Management business. The macroeconomic environment contributed to increased customer caution and extended deal cycles, leading to adjusted guidance for the full year.Q1-2025 Updates
Positive Updates
Revenue and Operating Income Exceed Expectations
Rapid7 ended the first quarter with revenue and operating income above guidance ranges, achieving $210 million in revenue, a 3% year-over-year growth.
Detection and Response Business Growth
Detection and Response (D&R) continued as the core growth driver with over half of total ARR and mid-teens growth. This segment maintained strong customer demand and expanded its market opportunity.
International Revenue Growth
International revenue grew by 10% year-over-year, representing 25% of total revenue, demonstrating strong demand outside the U.S.
Profitability and Free Cash Flow
Rapid7 demonstrated strong operational discipline with $32 million in operating income and $25 million in free cash flow generation during Q1.
Negative Updates
ARR Growth Below Expectations
ARR ended at $837 million with 4% year-over-year growth, falling short of expectations due to challenges in the Risk and Exposure Management business.
Challenges in Risk and Exposure Management
The Risk and Exposure Management business experienced continued growth deceleration, missing expectations and facing macroeconomic headwinds.
Increased Customer Caution
Customers, particularly in the North American mid-market enterprise segment, demonstrated greater scrutiny and tighter budget control, leading to extended deal cycles.
Adjusted ARR and Revenue Guidance
Full-year ARR guidance was lowered and widened to $850 million to $880 million, growth of 1% to 5%, reflecting a slower start to the year and increased market uncertainty.
Company Guidance
During Rapid7's Q1 2025 earnings call, the company provided financial guidance for the second quarter and full fiscal year 2025. The company reported an ARR of $837 million, a 4% year-over-year increase, despite some challenges. Revenue for the first quarter was $210 million, surpassing expectations, with product revenue growing by 4% to $204 million. Operating income for the quarter was $32 million, and adjusted EBITDA was $39 million. Rapid7 adjusted its full-year ARR guidance to a range of $850 million to $880 million, reflecting 1% to 5% growth, and maintained its operating income outlook of $125 million to $135 million. For Q2, the company expects revenue between $211 million and $213 million, with non-GAAP operating income projected between $30 million and $32 million. The company anticipates non-GAAP net income per share of $1.78 to $1.91 for the full year, based on approximately 76.7 million diluted weighted average shares.Rapid7 Financial Statement Overview
Summary
Rapid7 shows strong revenue growth and improving profitability metrics. However, high leverage and low equity pose challenges, despite significant improvements in cash flow generation, enhancing financial stability. Continued focus on reducing debt and improving profit margins will be crucial for future financial health.Income Statement
Rapid7 has demonstrated strong revenue growth, with a notable increase from $411.5 million in 2020 to $849.2 million in TTM (Trailing-Twelve-Months). The gross profit margin remains robust at approximately 70.3% in TTM. However, the net profit margin is modest at 3.0% due to high operating expenses, although it has improved from negative margins in previous years. EBIT and EBITDA margins have also shown positive trends, indicating improved operational efficiency.75
Positive
Balance Sheet
The company's balance sheet shows a high debt-to-equity ratio due to significant leverage, with total debt at $1.01 billion against a relatively low stockholders' equity of $52.7 million in TTM. The equity ratio is low at 3.2%, indicating heavy reliance on debt financing. However, the return on equity has improved to 48.1% in TTM, reflecting better profitability on equity.60
Neutral
Cash Flow
Rapid7's cash flow statement reflects strong operating cash flow, with a TTM figure of $170.4 million. Free cash flow has grown significantly, with a 88.8% increase from 2020 to TTM. The operating cash flow to net income ratio is healthy at 6.7, indicating efficient cash generation relative to net income. The company has improved its free cash flow position, which supports financial flexibility.70
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 844.01M | 777.71M | 685.08M | 535.40M | 411.49M |
| Gross Profit | 592.97M | 545.97M | 470.73M | 366.46M | 289.97M |
| EBITDA | 97.31M | -39.14M | -70.28M | -88.12M | -50.09M |
| Net Income | 25.53M | -149.26M | -124.72M | -146.33M | -98.85M |
Balance Sheet | |||||
| Total Assets | 1.65B | 1.51B | 1.36B | 1.30B | 913.12M |
| Cash, Cash Equivalents and Short-Term Investments | 521.71M | 383.17M | 291.45M | 223.43M | 312.46M |
| Total Debt | 1.02B | 1.02B | 914.34M | 912.56M | 463.94M |
| Total Liabilities | 1.63B | 1.62B | 1.48B | 1.42B | 841.59M |
| Stockholders Equity | 17.71M | -118.18M | -120.07M | -126.00M | 71.54M |
Cash Flow | |||||
| Free Cash Flow | 168.25M | 84.03M | 40.68M | 35.05M | -15.04M |
| Operating Cash Flow | 171.67M | 104.28M | 78.20M | 53.92M | 4.89M |
| Investing Cash Flow | -46.52M | -178.75M | -39.99M | -325.38M | -156.29M |
| Financing Cash Flow | 5.58M | 79.60M | 7.42M | 264.13M | 200.93M |
Rapid7 Technical Analysis
Negative
22.53
Price Trends
23.37
Negative
24.64
Negative
31.94
Negative
Market Momentum
-0.29
Positive
42.90
Neutral
27.69
Neutral
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 22.53 is below the 20-day moving average (MA) of 23.29, below the 50-day MA of 23.37, and below the 200-day MA of 31.94, indicating a bearish trend. The MACD of -0.29 indicates Positive momentum. The RSI at 42.90 is Neutral, neither overbought nor oversold. The STOCH value of 27.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $5.10B | 28.68 | 40.23% | ― | 9.58% | 12.41% | |
74 Outperform | $115.03B | 721.64 | -5.76% | ― | 25.94% | -226.80% | |
66 Neutral | $4.09B | ― | -12.09% | ― | 11.79% | 35.35% | |
64 Neutral | $5.80B | ― | -22.21% | ― | 13.34% | 13.71% | |
63 Neutral | $34.55B | 5.25 | -11.40% | 1.91% | 5.47% | -20.39% | |
58 Neutral | $1.47B | 57.26 | 164.75% | ― | 6.19% | ― | |
46 Neutral | $11.57B | ― | -11.15% | ― | 23.16% | -9.81% |
* Technology Sector Average
Performance Comparison
RPD
Rapid7
22.53
-17.20
-43.29%
QLYS
Qualys
139.15
-5.31
-3.68%
VRNS
Varonis Systems
53.38
6.47
13.79%
TENB
Tenable Holdings
33.07
-9.83
-22.91%
CRWD
CrowdStrike Holdings
462.03
207.88
81.79%
SAIL
SailPoint, Inc.
20.47
-4.08
-16.62%
Rapid7 Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Rapid7 Establishes $200 Million Credit Facility
Neutral
Jun 25, 2025
On June 25, 2025, Rapid7, Inc. entered into a credit agreement establishing a senior secured revolving credit facility of up to $200 million. This facility is intended to finance working capital, capital expenditures, and other corporate purposes, with borrowings subject to customary conditions and interest rates based on the SOFR or alternate base rate. The agreement includes various covenants and conditions, with potential implications for the company’s financial flexibility and operational strategy.
The most recent analyst rating on (RPD) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on Rapid7 stock, see the RPD Stock Forecast page.
Executive/Board ChangesShareholder Meetings
Rapid7 Appoints New Chairman at Annual Meeting
Neutral
Jun 13, 2025
On June 11, 2025, Rapid7, Inc. held its 2025 Annual Meeting of Stockholders where several key proposals were voted on, including the election of eleven directors, ratification of KPMG LLP as the independent auditor, and advisory votes on executive compensation. The stockholders approved all proposals, with the decision to hold annual advisory votes on executive compensation. Additionally, Marc Brown was appointed as the new Chairman of the Board, succeeding Corey Thomas, who remains the CEO.
The most recent analyst rating on (RPD) stock is a Hold with a $36.00 price target. To see the full list of analyst forecasts on Rapid7 stock, see the RPD Stock Forecast page.
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.