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Rapid7 Inc . (NASDAQ:RPD), a cybersecurity firm known for its analytics and automation solutions, has seen its stock tumble to $28.83, near its 52-week low. The company, with a market capitalization of $1.83 billion and impressive gross margins of 70%, continues to generate solid revenue of $844 million. This significant downturn reflects a broader trend in the tech sector, where companies are grappling with market headwinds. Over the past year, Rapid7’s stock has experienced a steep decline of nearly 50%. According to InvestingPro analysis, the stock appears to be trading below its Fair Value, with technical indicators suggesting oversold conditions. Investors are closely monitoring the company’s performance, as the current price level could represent a critical juncture for the stock’s future trajectory. For deeper insights, including 15 additional ProTips and comprehensive valuation metrics, explore the detailed Pro Research Report available on InvestingPro.
In other recent news, Rapid7 reported its fourth-quarter revenue at $216.26 million, surpassing analyst expectations of $212.17 million and marking a 5% year-over-year increase. Despite this, the company’s guidance for the first quarter and full year 2025 fell short of Wall Street’s projections, with expected revenue between $207-209 million for Q1 and $860-870 million for the full year, compared to estimates of $214.35 million and $886.25 million, respectively. Adjusted earnings per share for the fourth quarter were $0.48, slightly below the consensus forecast of $0.50.
The company also reported a 4% year-over-year growth in annual recurring revenue (ARR) to $839.8 million, aligning with modest expectations. Analysts from DA Davidson, Mizuho (NYSE:MFG), Citi, and Jefferies have adjusted their price targets for Rapid7, reflecting concerns over the company’s guidance and operational challenges. DA Davidson and Mizuho both maintained a Neutral rating while reducing their price targets to $35 and $39, respectively. Citi and Jefferies, on the other hand, retained a Buy rating, with price targets adjusted to $44 and $45.
These analysts highlighted the company’s strategic focus on Managed Detection and Response (MDR) and Detection and Response (D&R) segments, despite the weaker financial outlook. Rapid7’s management has projected ARR growth of 4-6% for 2025, aligning with previous guidance. However, the outlook for operating margins, earnings per share, and free cash flow appears less favorable, mainly due to increased investments aimed at enhancing their capabilities in key growth areas.
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