Rapid7 (R7D) AI Stock Analysis

Rapid7

(Frankfurt:R7D)

Rating:―N/A

Action:N/A

Date:―

No summary available

Positive Factors

Strong Cash GenerationRapid7’s substantial operating cash generation and liquidity provide resources to fund product investment, manage restructuring costs, and address upcoming obligations. This financial capacity supports strategic execution and gives the company greater flexibility while it works to restore durable growth.

Negative Factors

Revenue and ARR ContractionFalling revenue and sequential ARR contraction indicate that Rapid7 is still losing growth momentum, limiting near-term operating leverage and making expansion within existing customers more important. A prolonged decline would weaken the recurring-revenue base that underpins the software model.

Rapid7 (R7D) vs. iShares MSCI Germany ETF (EWG)

Market Cap: EUR 1.00B
Dividend Yield: ―
Average Volume (3M): 507
Price to Earnings (P/E): 48.7
Beta (1Y): 0.75
Revenue Growth: -6.74%
EPS Growth: -37.03%
Country: Germany
Employees: 2,613
Sector: General
Sector Strength: 55
Industry: Software - Infrastructure

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. Th...

Rapid7 Earnings Call Summary

Earnings Call Date:Aug 09, 2026(Q2-2026)|% Change Since:48.98%|Next Earnings Date:Nov 03, 2026

Earnings Call SentimentNeutral

The call presents a balanced picture: clear operational progress on profitability, cash generation, margin guidance upgrades, and focused strategic direction (AI-first, core platform) are offset by near-term revenue/ARR declines, exposure management weakness, gross margin compression, and a meaningful restructuring that impacts ~12% of employees. Management beat guidance for the quarter and raised margin targets, but growth challenges and transformation timing create uncertainty. Overall, there is cautious optimism—improved financial discipline and cash position, but the company must execute over multiple quarters to translate investments into durable ARR growth.

Positive Updates

ARR and Core Growth Stabilization

Total ARR ended Q2 at $824M. Core platform solutions (D&R + exposure management) represent over 80% of ARR and grew ~1% year-over-year, led by Detection & Response which grew ~5% YoY and represents ~55% of total ARR.

Negative Updates

Total Revenue and ARR Pressure

Total Q2 revenue was $210.9M, down ~1.5% year-over-year. Management signaled total ARR declined sequentially and expects ending ARR in Q3 of ~ $812M (sequential decline) with Q3 revenue guidance implying ~4% YoY decline at the midpoint.

Company Guidance

Rapid7 guided ending Q3 FY26 ARR of approximately $812M (core D&R + exposure management roughly flat Q/Q, declines expected from non‑core), Q3 revenue of $208–210M (≈‑4% YoY at midpoint), Q3 non‑GAAP operating income of $34–36M (~16.7% margin at midpoint) and non‑GAAP diluted EPS of $0.44–0.47 on ~80M fully diluted shares. For full‑year FY26 they guided revenue of $837–841M (≈‑2% YoY at midpoint), non‑GAAP operating income of $129–133M (~15.6% margin at midpoint with an implied ~20% non‑GAAP operating margin in Q4), non‑GAAP EPS of $1.78–1.83 on ~79M shares, and free cash flow of about $130M (~15.5% FCF margin). Management expects restructuring charges of ~$10–11M (mostly cash in Q3–Q4) with roughly 12% of the workforce impacted; the company exited Q2 with ARR $824M, Q2 non‑GAAP operating income $28.9M, Q2 FCF $31.9M, cash & short‑term investments ≈$703M, and a $200M undrawn credit facility while planning to address $600M of convertible notes due March 2027.

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 (55)

Financial Indicators

DE:R7D against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QLYS	86Outperform	$7.75B	35.79	37.17%	―	10.71%	14.48%
CRWD	80Outperform	$256.42B	6869.60	1.29%	―	24.30%	―
ORCL	79Outperform	$395.11B	18.38	42.58%	1.68%	21.62%	45.95%
TENB	66Neutral	$5.59B	329.97	8.46%	―	9.53%	―
S	65Neutral	$8.75B	-22.93	-23.16%	―	21.09%	23.48%
Sector *	55Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%

* General Sector Average

Performance Comparison

DE:R7D and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
DE:R7D	Rapid7 Inc.	14.71	-1.41	-8.75%
ORCL	Oracle Corporation	119.22	-125.67	-51.32%
QLYS	Qualys Inc	207.60	86.39	71.27%
TENB	Tenable Holdings	47.45	19.39	69.10%
CRWD	Crowdstrike Holdings	241.81	108.33	81.16%
S	Sentinelone, Inc.	23.16	6.29	37.29%

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.

Rapid7 AI Stock Analysis