Mizuho upgrades Rubrik stock rating to Outperform on data protection strength

Investing.com - Mizuho upgraded Rubrik Inc (NYSE:RBRK) from Neutral to Outperform on Monday, maintaining its price target of $97.00. According to InvestingPro data, Rubrik currently trades at $71.55, with analysts maintaining a strong buy consensus and setting targets as high as $130.

The stock has declined approximately 16% since mid-May, underperforming compared to the iShares Expanded Tech-Software Sector ETF (IGV), which rose 3% during the same period, according to Mizuho’s analysis. Despite this recent pullback, InvestingPro data shows Rubrik has delivered a remarkable 65.47% return over the past year.

Despite this price decline, Mizuho’s market checks on Rubrik remain favorable, with the firm citing potential for "healthy Subscription ARR upside over the near-to medium term." The firm highlighted Rubrik’s focus on data protection and ransomware defenses as key differentiators from competitors. This aligns with Rubrik’s impressive 47.72% revenue growth and 77.96% gross profit margin in the last twelve months.

Mizuho noted that Rubrik’s current valuation, trading at 7x CY27 EV/ARR with at least a mid-20s 2-year CAGR, does not appear to account for potential growth in AI resiliency and enhanced identity recovery capabilities.

The upgrade comes approximately six months after Mizuho’s previous valuation-driven downgrade of the data security company.

In other recent news, Rubrik reported strong fiscal second-quarter results with a 51% year-over-year revenue growth, surpassing consensus estimates by 10%. Following these results, FBN Securities raised its price target for Rubrik to $115 from $100, maintaining an Outperform rating. Additionally, Rubrik has entered a strategic collaboration with Amazon Web Services (AWS) to enhance cyber resilience for cloud customers. This partnership will integrate Rubrik’s Preemptive Recovery Engine with AWS’s cloud infrastructure to improve data protection and security. In other developments, Rubrik launched the Rubrik Okta Recovery solution, expanding its identity recovery capabilities for Okta Identity Provider environments. This new solution offers automated, immutable backups and granular recovery for Okta objects and metadata. Furthermore, Rubrik announced an expanded integration with CrowdStrike’s Falcon cybersecurity platform, enhancing identity security capabilities. These initiatives reflect Rubrik’s continued focus on strengthening its cybersecurity offerings and partnerships.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.