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Investing.com - JPMorgan has reiterated its Neutral rating and $23.00 price target on Rapid7 (NASDAQ:RPD), citing persistent execution issues at the cybersecurity firm. The stock, currently trading at $20.58, has declined over 10% in the past week and is hovering near its 52-week low of $20.22. According to InvestingPro analysis, the company appears undervalued despite recent market pressure.
The investment bank expects another quarter of NNARR (Net New Annual Recurring Revenue) deceleration for Rapid7, in line with the company’s guidance, which implies improvement in the second half of the year.
JPMorgan notes that Rapid7 had several large deals slip into the second quarter from the previous period, with a few closing in Q2, including a seven-figure, multi-million dollar deal according to management.
While management indicated that the deal environment was healthy last quarter and has remained stable in Q2, the company experienced some incremental pressure in the mid-market segment with limited visibility on deal closing timelines.
Despite Rapid7 trading at 1.2x CY26 sales, which some might view as attractive, JPMorgan believes investors will continue to penalize the stock due to its history of mixed execution and guidance that "may not be conservative enough."
In other recent news, Rapid7 reported persistent execution issues, as noted by JPMorgan, which reiterated its Neutral rating and maintained a $23.00 price target for the company. The investment bank anticipates another quarter of deceleration in Net New Annual Recurring Revenue (NNARR), consistent with Rapid7’s guidance, while suggesting potential improvement in the latter half of the year. Additionally, Rapid7 has launched Incident Command, a next-generation Security Information and Event Management (SIEM) solution, designed to enhance threat detection and response capabilities through AI-powered workflows.
The company also announced that its InsightGovCloud Platform has achieved FedRAMP Authorization at the Moderate Impact Level 2, allowing U.S. federal agencies to utilize its cloud-based security services. Rapid7 introduced Active Patching, an automated patching solution integrated into its Exposure Command platform, aimed at helping security teams remediate vulnerabilities. Furthermore, Rapid7 has expanded its offerings on the AWS Marketplace by adding its exposure management capabilities to the new AI Agents and Tools category, facilitating the security of artificial intelligence applications. These developments highlight Rapid7’s ongoing efforts to enhance its cybersecurity solutions and expand its market reach.
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