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Rapid7
(NASDAQ:RPD)
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Rating:58Neutral
Price Target:
$11.00
▲(93.66% Upside)
Action:Reiterated
Date:07/08/26
The score is anchored by solid cash generation and improving profitability, but constrained by high leverage and weakening/declining top-line and ARR trends. Technicals show a strong rebound above key moving averages, yet the stock looks overextended on momentum indicators. Valuation remains relatively rich (P/E ~30.5) given revenue decline guidance, while the earnings call provides some support via raised margin/FCF outlook but with ongoing execution risks.
Positive Factors
Free Cash Flow
Sustained and improving free cash flow provides durable funding for product investment, M&A and debt servicing without relying on equity raises. Strong cash conversion (FCF closely tracking earnings) supports execution of the AI-SOC shift and gives management runway to stabilize revenue and expand margins over coming quarters.
Negative Factors
Elevated Leverage
High debt relative to a modest equity base materially increases refinancing and interest-rate risk, reducing financial flexibility. At current operating cash flow rates, deleveraging will be slow, constraining capital allocation choices and making the company more sensitive to any revenue or margin setbacks over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Free Cash Flow
Sustained and improving free cash flow provides durable funding for product investment, M&A and debt servicing without relying on equity raises. Strong cash conversion (FCF closely tracking earnings) supports execution of the AI-SOC shift and gives management runway to stabilize revenue and expand margins over coming quarters.
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
$762.54M
Dividend YieldN/A
Average Volume (3M)2.39M
Price to Earnings (P/E)32.5
Beta (1Y)1.34
Revenue Growth1.19%
EPS Growth-25.24%
CountryUS
Employees2,613
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.34
Shares Outstanding66,830,620
10 Day Avg. Volume3,068,968
30 Day Avg. Volume2,385,174
Financial Highlights & Ratios
PEG Ratio-3.46
Price to Book (P/B)6.36
Price to Sales (P/S)1.14
P/FCF Ratio6.81
Enterprise Value/Market Cap1.41
Enterprise Value/Revenue1.25
Enterprise Value/Gross Profit1.79
Enterprise Value/Ebitda13.03
Forecast
1Y Price Target
$7.35Price Target Upside29.33% Upside
Rating ConsensusHold
Number of Analyst Covering18
EPS Forecast (FY)1.56
Revenue Forecast (FY)$838.68M
Rapid7 Business Overview & Revenue Model
Company Description
Rapid7, Inc. specializes in delivering cutting-edge cybersecurity solutions. Central to its offerings is a sophisticated, cloud-native platform designed to equip organizations with analytics-driven programs for managing and mitigating cyber risks....
How the Company Makes Money
Rapid7 primarily makes money by selling cybersecurity software on a subscription basis, generating recurring revenue from customers who pay for access to its security platforms and modules over contract terms (often billed annually or multi-year)....
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 | 146.73M | 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
Positive
5.68
Price Trends
7.54
Positive
6.82
Positive
11.07
Positive
Market Momentum
1.09
Negative
78.37
Negative
88.90
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPD, the sentiment is Positive. The current price of 5.68 is below the 20-day moving average (MA) of 8.33, below the 50-day MA of 7.54, and below the 200-day MA of 11.07, indicating a bullish trend. The MACD of 1.09 indicates Negative momentum. The RSI at 78.37 is Negative, neither overbought nor oversold. The STOCH value of 88.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $5.61B | 27.53 | 37.15% | ― | 10.21% | 13.31% | |
74 Outperform | $25.87B | 99.48 | 3.59% | ― | 11.75% | 85.38% | |
65 Neutral | $18.27B | -57.68 | 55.24% | ― | 45.73% | 48.87% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
60 Neutral | $5.26B | -39.49 | -26.10% | ― | 15.27% | -39.93% | |
58 Neutral | $762.54M | 32.54 | 16.38% | ― | 1.19% | -25.24% |
* Technology Sector Average
RPD
Rapid7
11.17
-11.82
-51.41%
QLYS
Qualys
152.69
17.08
12.59%
VRNS
Varonis Systems
44.53
-5.05
-10.18%
OKTA
Okta
138.63
47.07
51.41%
RBRK
Rubrik, Inc. Class A
84.38
-0.16
-0.19%
Rapid7 Corporate Events
Executive/Board ChangesShareholder Meetings
Rapid7 Shareholders Endorse Board, Auditor and Executive Pay
Positive
Jun 10, 2026
On June 9, 2026, Rapid7, Inc. held its 2026 Annual Meeting of Stockholders, where shareholders elected eleven directors to serve until the 2027 annual meeting, signaling continued support for the company’s current board composition and gover...
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Rapid7 Appoints Wael Mohamed CEO in Leadership Transition
Positive
Jun 1, 2026
Rapid7 has announced a leadership transition effective June 1, 2026, with board member Wael Mohamed appointed chief executive officer and long-time CEO Corey Thomas moving to the role of executive chairman. The board also named Marc Brown lead ind...
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.