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Rapid7
(NASDAQ:RPD)
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Rating:51Neutral
Price Target:
$12.50
▼(-7.41% Downside)
Action:Reiterated
Date:09/06/26
The score is held back primarily by deteriorating growth (TTM revenue contraction and guided revenue/ARR declines) and a highly leveraged balance sheet, despite a clear profitability and cash-flow improvement. Technicals are also soft with weak near-term momentum. Valuation appears only fair-to-stretched (P/E ~36) given the near-term growth headwinds, partially offset by improved margin/FCF guidance and a strong liquidity position noted on the call.
Positive Factors
Strong cash generation and liquidity
Rapid7 is generating substantial operating and free cash flow while maintaining a sizeable cash and short-term investment balance. This provides funding for product investment, restructuring, and debt obligations, improving financial resilience and supporting execution through the planned transformation.
Negative Factors
Revenue and ARR are declining
Declining revenue and sequential ARR indicate that customer expansion and new business are not yet offsetting contraction in weaker offerings. Sustained top-line pressure can reduce operating leverage, constrain reinvestment, and make the turnaround dependent on successful execution across multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and liquidity
Rapid7 is generating substantial operating and free cash flow while maintaining a sizeable cash and short-term investment balance. This provides funding for product investment, restructuring, and debt obligations, improving financial resilience and supporting execution through the planned transformation.
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.
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The Fly
The FlyRapid7 (RPD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$806.79M
Dividend YieldN/A
Average Volume (3M)2.05M
Price to Earnings (P/E)39.3
Beta (1Y)1.50
Revenue Growth0.07%
EPS Growth-33.38%
CountryUS
Employees2,613
SectorTechnology
Sector Strength88
IndustrySoftware - Infrastructure
Share Statistics
EPS (TTM)0.30
Shares Outstanding67,400,640
10 Day Avg. Volume1,848,517
30 Day Avg. Volume2,050,021
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$11.84Price Target Upside-12.28% Downside
Rating ConsensusHold
Number of Analyst Covering21
EPS Forecast (FY)1.8
Revenue Forecast (FY)$838.97M
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 subscriptions, typically sold on term-based contracts (often annual or multi-year) and delivered largely via SaaS, with some offerings available for customer-managed deployment. Subscr...
Rapid7 Earnings Call Summary
Earnings Call Date:Aug 10, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Neutral
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.
Read all updates
Q2-2026 Updates
Positive
Negative
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.
Read all positive updates
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 Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
38
Negative
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 855.92M | 859.79M | 844.01M | 777.71M | 685.08M | 535.40M |
| Gross Profit | 593.13M | 604.75M | 592.97M | 545.97M | 470.73M | 366.46M |
| EBITDA | 77.74M | 86.05M | 97.31M | -39.14M | -70.28M | -88.12M |
| Net Income | 20.14M | 23.38M | 25.53M | -149.26M | -124.72M | -146.33M |
Balance Sheet | ||||||
| Total Assets | 1.74B | 1.73B | 1.65B | 1.51B | 1.36B | 1.30B |
| Cash, Cash Equivalents and Short-Term Investments | 702.58M | 474.67M | 521.71M | 383.17M | 291.45M | 223.43M |
| Total Debt | 961.65M | 1.03B | 1.02B | 1.02B | 914.34M | 912.56M |
| Total Liabilities | 1.55B | 1.57B | 1.63B | 1.62B | 1.48B | 1.42B |
| Stockholders Equity | 196.70M | 154.73M | 17.71M | -118.18M | -120.07M | -126.00M |
Cash Flow | ||||||
| Free Cash Flow | 140.28M | 144.53M | 168.25M | 99.91M | 57.82M | 44.91M |
| Operating Cash Flow | 152.93M | 152.13M | 171.67M | 104.28M | 78.20M | 53.92M |
| Investing Cash Flow | 11.18M | -209.44M | -46.52M | -178.75M | -39.99M | -325.38M |
| Financing Cash Flow | -124.00K | -43.81M | 5.58M | 79.60M | 7.42M | 264.13M |
Rapid7 Technical Analysis
Positive
13.50
Price Trends
11.53
Positive
9.48
Positive
9.71
Positive
Market Momentum
0.14
Negative
51.95
Neutral
76.08
Neutral
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 13.5 is above the 20-day moving average (MA) of 11.88, above the 50-day MA of 11.53, and above the 200-day MA of 9.71, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 51.95 is Neutral, neither overbought nor oversold. The STOCH value of 76.08 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $6.05B | 30.17 | 37.17% | ― | 10.71% | 14.48% | |
78 Outperform | $31.88B | 107.91 | 4.26% | ― | 11.22% | 74.46% | |
69 Neutral | $22.12B | -84.02 | 50.26% | ― | 42.45% | 46.36% | |
67 Neutral | $5.46B | -38.98 | -26.91% | ― | 15.86% | -33.39% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% | |
51 Neutral | $806.79M | 39.27 | 12.33% | ― | 0.07% | -33.38% |
* Technology Sector Average
RPD
Rapid7
11.97
-8.84
-42.48%
QLYS
Qualys
174.96
38.57
28.28%
VRNS
Varonis Systems
47.56
-12.27
-20.51%
OKTA
Okta
182.37
89.99
97.41%
RBRK
Rubrik, Inc. Class A
106.71
26.22
32.58%
Rapid7 Corporate Events
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Rapid7 refreshes board with new cybersecurity leadership
Positive
Aug 31, 2026
On August 27, 2026, Rapid7 received resignations from directors Michael Burns, Benjamin Holzman, Thomas Schodorf and Reeny Sondhi, with the Board granting cash payments equal to compensation through June 30, 2027 and accelerating vesting of their ...
Business Operations and StrategyFinancial Disclosures
Rapid7 Announces 2026 Restructuring to Refocus Core Platform
Negative
Aug 10, 2026
On August 7, 2026, Rapid7’s board approved a 2026 restructuring plan that simplifies operations and reallocates investment toward its core Command Platform, detection and response, and exposure management capabilities. The plan includes cutt...
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.