Functional Brands closes $8 million private placement and completes Nasdaq listing
Investing.com - Piper Sandler lowered its price target on Rapid7 (NASDAQ:RPD) to $19.00 from $30.00 on Wednesday, while maintaining a Neutral rating on the cybersecurity firm’s stock. The new target comes as Rapid7 shares trade at $17.80, hovering just above their 52-week low of $17.73, according to InvestingPro data.
The price target reduction follows Rapid7’s third-quarter results, which showed modest downside to Annual Recurring Revenue (ARR) expectations, marking the second quarter this year with negative Net New ARR (NNARR). This performance has contributed to the stock’s steep 55.75% decline year-to-date.
Piper Sandler noted that the company has provided a more conservative outlook for fourth-quarter performance, significantly lowering growth expectations for the period. Despite these challenges, InvestingPro data shows Rapid7 trading at a PEG ratio of just 0.27, suggesting potential undervaluation relative to its earnings growth. Unlock additional insights with InvestingPro’s comprehensive research reports covering 1,400+ US stocks.
The research firm attributed the guidance reduction largely to prudence rather than a significant deterioration in demand compared to the previous quarter, citing upcoming leadership changes including a new CFO joining in December and internal adjustments being implemented by the new Chief Commercial Officer.
Despite the near-term challenges, Piper Sandler indicated that optimism remains centered around Rapid7’s Managed Detection and Response (MDR) opportunity, though it cautioned this potential would take time to materialize. According to InvestingPro Fair Value analysis, Rapid7 appears undervalued at current levels, with a strong free cash flow yield of 16% potentially providing financial flexibility as the company navigates its transition.
In other recent news, Rapid7 reported its third-quarter earnings for 2025, surpassing analysts’ expectations. The company achieved an earnings per share of $0.57, exceeding the forecasted $0.45. Additionally, Rapid7’s revenue reached $218 million, which was higher than the anticipated $215.95 million. Despite these positive results, concerns remain among investors about the company’s future growth prospects. In related developments, Jefferies downgraded Rapid7’s stock from Buy to Hold, lowering its price target from $22.00 to $19.00. The downgrade was attributed to execution concerns, particularly regarding the company’s Annual Recurring Revenue guidance. Jefferies acknowledged Rapid7’s strategic focus on its Managed Detection & Response business, noting its faster growth compared to the vulnerability management offerings. These recent developments provide a mixed outlook for Rapid7, balancing strong earnings performance with strategic and execution challenges.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.