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On Tuesday, JPMorgan analyst Brian Essex adjusted the price target for Rapid7 shares, traded on (NASDAQ:RPD), to $40.00 from the previous $42.00 while keeping a Neutral rating on the stock. Currently trading at $38.33, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $38 to $55. Essex expressed concern over the substantial quarter-over-quarter increase required in the fourth quarter of 2024 to meet the full-year annual recurring revenue (ARR) targets. This necessity indicates a year-over-year decrease and poses an additional challenge for investor confidence. According to InvestingPro data, Rapid7’s revenue growth has slowed to 10.05% in the last twelve months, though the company maintains a healthy gross profit margin of 70.65%.
Rapid7 has been navigating sales execution issues amid a difficult macroeconomic climate, and JPMorgan’s stance remains cautious. The firm anticipates a slowdown in growth and margin compression for the fiscal year 2024. During the upcoming earnings call, indicators of improved and sustainable sales execution, as well as sales momentum, will be of particular interest to analysts, especially after the introduction of Rapid7’s new Partner program, its FedRAMP designation in the quarter, and the traction of newer products.
Essex stated that while waiting for enhanced sales productivity to foster better growth and cash flow, the risk-reward balance at the current levels justifies a Neutral rating. The revised December 2025 price target reflects a mid-single-digit growth outlook and a desire for more significant product traction. Rapid7’s efforts to overcome these challenges and their impact on the company’s financial performance will continue to be closely monitored by investors and analysts alike.
In other recent news, Rapyd Financial Network is in discussions to raise $300 million in funding. This investment round would mark a decrease in the company’s valuation to $3.5 billion, down from its previous estimate of $9 billion in 2021. The funding is partially intended for the acquisition of a payment processing startup.
On a separate note, Rapid7, Inc. announced the impending resignation of its Chief People Officer, Christina Luconi. The company has initiated a search for her replacement, with Luconi expected to assist in the transition process. The reasons behind Luconi’s departure were not specified, but the company intends to maintain continuity during the transition period.
These are recent developments for both Rapyd and Rapid7, providing investors with updates on their respective financial and personnel changes. It is important to note that these details are based on information from the companies themselves and do not include speculative or unverified data.
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