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On Friday, Piper Sandler showed confidence in Rubrik Inc (NYSE: RBRK) by raising its price target to $87 from $83, while maintaining an Overweight rating on the company’s shares. The adjustment reflects the analyst’s view that the market continues to undervalue Rubrik’s momentum and its transition to cloud-based services. According to InvestingPro data, Rubrik’s stock has surged over 80% in the past six months, with analyst targets ranging from $47 to $90. InvestingPro analysis suggests the stock is currently trading above its Fair Value.
Rubrik has demonstrated significant growth, with its Cloud Annual Recurring Revenue (ARR) ending the year with a 67% increase and accounting for 80% of the company’s Total (EPA:TTEF) ARR. Despite the raised guidance compared to previous figures, the analyst believes that the guidance remains conservative, allowing room for potential beat-and-raise scenarios throughout the fiscal year 2026, even amidst a volatile macroeconomic environment. InvestingPro data reveals a robust revenue growth of 33% in the last twelve months, with analysts expecting 37% growth in the current fiscal year. Two key InvestingPro Tips highlight strong sales growth expectations but also indicate the company isn’t expected to be profitable this year (subscribers can access 5 additional exclusive tips).
The analyst highlighted several factors contributing to Rubrik’s growth, including cyber resilience, market share gains, ransomware protection, the Data Observability, Recovery, and Automation (DORA) platform, cross-selling opportunities with new product launches like Identity Recovery, edition upsells, and vendor consolidation. These elements are seen as major drivers for the company’s continued expansion.
Furthermore, Rubrik’s free cash flow (FCF) estimates are trending upwards, with projections indicating the company could surpass $200 million in FCF by fiscal year 2027. This expectation is bolstered by positive feedback on Rubrik’s channel effectiveness.
The analyst’s commentary underscores Rubrik as one of their top picks, citing its compelling valuation when adjusted for growth in the current market environment, which is characterized by a scarcity of growth opportunities. Even after a strong after-hours performance, Rubrik’s stock is believed to be trading at a roughly 30% discount compared to other growth-oriented cloud companies. The reiterated Overweight rating and increased price target are based on higher growth estimates and expectations.
In other recent news, Rubrik Inc reported robust fourth-quarter results, with annual recurring revenue (ARR) exceeding expectations by $33 million and accelerating growth to 37%. Rosenblatt Securities noted the company’s revenue figures were approximately 11% higher than projected, with subscription revenue rising by 53% year-over-year. Rubrik’s total ARR reached $1.093 billion, surpassing forecasts from several analysts, including Mizuho (NYSE:MFG) Securities, which had anticipated a 35% increase. The company’s optimistic guidance for fiscal year 2026 suggests a midpoint revenue forecast of $1.153 billion, indicating a 30% year-over-year growth.
KeyBanc Capital Markets, while maintaining an Overweight rating, adjusted its price target to $82, citing lower peer multiples. Rosenblatt Securities also lifted its price target to $82, driven by Rubrik’s strong quarterly performance and positive outlook. Meanwhile, Mizuho Securities reduced its price target to $75, maintaining an Outperform rating, and Cantor Fitzgerald reaffirmed an Overweight rating with an $85 price target, praising the company’s financial achievements. Guggenheim maintained a Buy rating and a $76 target, acknowledging Rubrik’s strategic focus on cybersecurity and data resilience as key growth drivers. These developments reflect the company’s strong market position and continued potential for growth in the backup and recovery sector.
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