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Investing.com - Mizuho (NYSE:MFG) lowered its price target on Rapid7 (NASDAQ:RPD) to $25.00 from $27.00 on Friday, while maintaining a Neutral rating on the cybersecurity firm’s stock. The company’s shares, currently trading at $19.82, sit near their 52-week low of $19.21, having declined 48% over the past six months.
The adjustment follows Rapid7’s latest financial results, which showed total Annual Recurring Revenue (ARR) of $841 million, representing just 3% year-over-year growth and meeting analysts’ already modest expectations. The company maintains a healthy gross profit margin of 70.6%, though revenue growth has slowed to 6.2% over the last twelve months.
Mizuho cited ongoing budget scrutiny and elongated sales cycles as key challenges for Rapid7, with particular difficulties observed in the North American mid-market segment, prompting management to lower its 2025 ARR guidance to account for increased variability as it pursues larger, strategic deals.
Despite these headwinds, Rapid7 reported some positive developments, including several "meaningful" consolidation deals at higher Average Selling Prices (ASPs) and continued strength in its Detection & Response business segment.
The research firm noted that while Rapid7 maintains a decent position in Security Operations (SecOps) with a depressed valuation, recent execution issues will likely prevent the company from significantly improving ARR growth in the near term, coinciding with the announcement that Rapid7’s CFO is retiring. InvestingPro analysis suggests the stock is currently undervalued, with multiple indicators including RSI pointing to oversold conditions. Subscribers can access 12 additional ProTips and comprehensive valuation metrics for deeper insights.
In other recent news, Rapid7 Inc . reported its second-quarter 2025 earnings, surpassing analysts’ expectations. The company achieved an earnings per share (EPS) of $0.58, notably higher than the forecasted $0.45, representing a 28.89% surprise. Additionally, Rapid7 exceeded revenue predictions, recording $214 million compared to the expected $212.01 million. Despite these strong financial results, the stock experienced a decline of 0.85% in after-hours trading. This development occurs as the market evaluates Rapid7’s performance and future strategy. Analyst firms have not provided any upgrades or downgrades in the recent news. Investors remain focused on the company’s ability to maintain its financial momentum.
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