Rapid7 (RPD) AI Stock Analysis

• Market Cap: $1.54B
• Dividend Yield: N/A
• Average Volume (3M): 778.98K
• Price to Earnings (P/E): 60.1
• Beta (1Y): 1.04
• Revenue Growth: 6.19%
• EPS Growth: N/A
• Country: US
• Employees: 2,413
• Sector: Technology
• Sector Strength: 86
• Industry: Software - Infrastructure
• EPS (TTM): 0.49
• Shares Outstanding: 64,239,296
• 10 Day Avg. Volume: 1,064,833
• 30 Day Avg. Volume: 778,980
• PEG Ratio: 0.81
• Price to Book (P/B): -16.57
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 48.91
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 0.81
• Enterprise Value/Gross Profit: 4.52
• Enterprise Value/Ebitda: 8.44
• 1Y Price Target: $30.27
• Price Target Upside: 26.13% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 19

• Rating: 62 Neutral
• Price Target: $25.00 ▲(4.17%Upside)

Rapid7's strong revenue growth and improving profitability are offset by high leverage and valuation concerns. Mixed technical indicators and cautious earnings guidance further moderate the outlook.

Positive Factors

Business Expansion

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.

Strategic Investments

Recent investments to accelerate growth largely focus on the detection and response business and are expected to benefit the company.

Negative Factors

Competitive Pressure

Customer count has declined, and the company has faced increased competitive pressures from other vendors.

Growth Outlook

The company's shares are expected to re-rate lower due to the low growth outlook and potential for further deceleration.

Guidance and Forecast

Incremental macroeconomic uncertainty ultimately led the company to lower and widen its FY25 ARR guidance.

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 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 Financial Statement Overview

Summary

Rapid7 shows strong revenue growth and cash flow generation. Despite these positives, the company struggles with high leverage and low operating margins, requiring focus on cost management and debt reduction.

Income Statement

Rapid7's income statement shows a strong gross profit margin of 70.3% in TTM (Trailing-Twelve-Months), reflecting efficient cost management. The net profit margin is modest at 2.99%, indicating profitability but room for improvement. Revenue growth has been consistent, with a 9.44% increase from 2023 to 2024. However, EBIT and EBITDA margins are relatively low at 2.90% and 8.38%, which suggests potential areas for operational improvement.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio due to substantial leverage, with total debt significantly exceeding stockholders' equity. However, the company's return on equity has improved to 48.11% in TTM, indicating efficient use of shareholder funds. The equity ratio is low, suggesting a heavily leveraged capital structure that poses potential risks.

Cash Flow

Cash flow analysis shows robust free cash flow growth and a strong operating cash flow to net income ratio of 6.72 in TTM, highlighting solid cash generation capabilities. The free cash flow to net income ratio of 6.26 further underscores the company's ability to convert net income into cash, indicating healthy financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	849.16M	844.01M	777.71M	685.08M	535.40M	411.49M
Gross Profit	596.98M	592.97M	545.97M	470.73M	366.46M	289.97M
EBITDA	71.14M	97.31M	-39.14M	-70.28M	-88.12M	-50.09M
Net Income	25.37M	25.53M	-149.26M	-124.72M	-146.33M	-98.85M
Balance Sheet
Total Assets	1.64B	1.65B	1.51B	1.36B	1.30B	913.12M
Cash, Cash Equivalents and Short-Term Investments	493.47M	521.71M	383.17M	291.45M	223.43M	312.46M
Total Debt	1.01B	1.02B	1.02B	914.34M	912.56M	463.94M
Total Liabilities	1.59B	1.63B	1.62B	1.48B	1.42B	841.59M
Stockholders Equity	52.72M	17.71M	-118.18M	-120.07M	-126.00M	71.54M
Cash Flow
Free Cash Flow	158.69M	168.25M	84.03M	40.68M	35.05M	-15.04M
Operating Cash Flow	170.36M	171.67M	104.28M	78.20M	53.92M	4.89M
Investing Cash Flow	-84.04M	-46.52M	-178.75M	-39.99M	-325.38M	-156.29M
Financing Cash Flow	5.95M	5.58M	79.60M	7.42M	264.13M	200.93M

Rapid7 Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 24.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 24 is above the 20-day moving average (MA) of 23.51, above the 50-day MA of 23.66, and below the 200-day MA of 32.91, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 54.96 is Neutral, neither overbought nor oversold. The STOCH value of 68.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RPD.

Rapid7 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	78 Outperform	$5.25B	29.42	40.23%	―	9.58%	12.41%
CRWD	74 Outperform	$122.65B	721.64	-5.76%	―	25.94%	-226.80%
TENB	70 Neutral	$4.11B	―	-12.09%	―	11.79%	35.35%
VRNS	64 Neutral	$5.60B	―	-22.21%	―	13.34%	13.71%
Sector *	63 Neutral	$33.61B	6.06	-11.53%	1.82%	5.53%	-18.79%
RPD	62 Neutral	$1.54B	60.12	164.75%	―	6.19%	―
SAIL	46 Neutral	$12.09B	―	-11.15%	―	23.16%	-9.81%

Rapid7 Corporate Events

Rapid7 Establishes $200 Million Credit Facility

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.

Rapid7 Appoints New Chairman at Annual Meeting

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.