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Rapid7 Inc RPD

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Stock XNAS Rating as of
$38.11 −1.01 (2.58%)
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As of Delayed Price Closed
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Company Report

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Rapid7 Earnings: Poor Execution Caps Top-Line Expansion Amid a Tough Macroenvironment

Malik Ahmed Khan

We maintain our $45 per share fair value estimate for no-moat Rapid7 after the firm kicked off fiscal 2024 with a strong set of quarterly results offset by a surprise reduction in the firm’s 2024 top-line outlook. The reduction in the firm’s sales outlook for 2024 was primarily driven by poor execution as Rapid7 failed to gain customer traction for its Cloud Risk Complete offering. While the firm’s outlook calls for a sequential recovery in annual recurring revenue, or ARR, peppered throughout the remainder of the fiscal year, investors were spooked by the guidance cut, resulting in the firm’s shares dropping sharply after hours.

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Price vs Fair Value

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RPD is trading at a 668% premium.
Price
$38.11
Fair Value
$74.00
Uncertainty
Very High
1-Star Price
$56.83
5-Star Price
$29.50
Economic Moat
Qns
Capital Allocation
Lxghnktq

Bulls Say, Bears Say

Bulls

Rapid7 has strong secular tailwinds in endpoint security and security operations where both markets are projected to grow rapidly.

Bears

The firm will likely have poor operating leverage and cash flow for the next few years, making it difficult to invest in order to stay competitive.

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News

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Trading Information

Previous Close Price
$39.12
Day Range
$37.98–39.20
52-Week Range
$35.22–61.88
Bid/Ask
$37.60 / $38.90
Market Cap
$2.38 Bil
Volume/Avg
731,841 / 885,149

Key Statistics

Price/Earnings (Normalized)
19.18
Price/Sales
3.06
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

Founded in 2000, Rapid7 is a cybersecurity company that began providing vulnerability management solutions. It has, however, expanded its portfolio to provide extended detection and response; security information and event management; cloud security, threat intelligence, and application security; and security orchestration, automation, and response. The Boston-based company went public in 2015.
Sector
Technology
Industry
Software - Infrastructure
Stock Style Box
Small Growth
Total Number of Employees
2,228
Website
https://www.rapid7.com

Competitors

Valuation

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Metric
RPD
QLYS
CRWD
Price/Earnings (Normalized)
 19.1826.13112.31
Price/Book Value
 —13.4536.32
Price/Sales
 3.069.7227.58
Price/Cash Flow
 19.0523.4175.61
Price/Earnings
RPD
QLYS
CRWD

Financial Strength

Metric
RPD
QLYS
CRWD
Quick Ratio
 1.021.461.60
Current Ratio
 1.191.551.76
Interest Coverage
 −0.96—−0.01
Quick Ratio
RPD
QLYS
CRWD

Profitability

Metric
RPD
QLYS
CRWD
Return on Assets (Normalized)
 7.72%27.77%13.35%
Return on Equity (Normalized)
 —64.54%40.68%
Return on Invested Capital (Normalized)
 19.38%53.57%24.76%
Return on Assets
RPD
QLYS
CRWD
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