Raymond James has revised its price target for Rapid7 (RPD, Financial), setting it at $40, down from $45, while maintaining an Outperform rating. The adjustment follows Rapid7's lighter-than-expected growth in their first-quarter results and a downward revision of their full-year forecasts. The firm highlights that the outlook for 2025 mirrors previous years where initial expectations were subsequently lowered following slow starts. Despite these challenges, there is an optimistic view that recent changes in the board could drive positive transformations in the long run.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 20 analysts, the average target price for Rapid7 Inc (RPD, Financial) is $33.53 with a high estimate of $44.00 and a low estimate of $21.00. The average target implies an upside of 25.41% from the current price of $26.74. More detailed estimate data can be found on the Rapid7 Inc (RPD) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Rapid7 Inc's (RPD, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Rapid7 Inc (RPD, Financial) in one year is $53.33, suggesting a upside of 99.44% from the current price of $26.74. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Rapid7 Inc (RPD) Summary page.
RPD Key Business Developments
Release Date: May 12, 2025
- ARR (Annual Recurring Revenue): $837 million, 4% year-over-year growth.
- Revenue: $210 million for Q1, 3% year-over-year growth.
- Product Revenue: $204 million, 4% year-over-year growth.
- International Revenue: 25% of total revenue, 10% year-over-year growth.
- Product Gross Margin: 76%.
- Total Gross Margin: 75%.
- Operating Income: $32 million for Q1.
- Adjusted EBITDA: $39 million for Q1.
- Non-GAAP Net Income per Share: $0.49.
- Free Cash Flow: $25 million for Q1.
- Cash, Cash Equivalents, and Investments: $593 million.
- Full Year ARR Guidance: $850 million to $880 million, 1% to 5% growth over prior year.
- Full Year Revenue Guidance: $853 million to $863 million, 1% to 2% growth over 2024.
- Full Year Operating Income Guidance: $125 million to $135 million.
- Full Year Free Cash Flow Guidance: $125 million to $135 million.
- Full Year Non-GAAP Net Income per Share Guidance: $1.78 to $1.91.
- Q2 Revenue Guidance: $211 million to $213 million, 1% to 2% year-over-year growth.
- Q2 Non-GAAP Operating Income Guidance: $30 million to $32 million.
- Q2 Non-GAAP Net Income per Share Guidance: $0.43 to $0.46.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Rapid7 Inc (RPD, Financial) ended the first quarter with revenue and operating income above guidance ranges.
- The detection and response business continues to be a core growth driver, representing over half of total ARR and maintaining mid-teens growth.
- Investments to improve cost structure are on track, setting up for profitability reacceleration in 2026.
- The company has expanded its capabilities through a new SOC innovation center in India, enhancing operational efficiency.
- Rapid7 Inc (RPD) has a strong focus on driving industry-leading product innovation and expanding cash flow.
Negative Points
- ARR fell short of expectations, ending at $837 million with only 4% year-over-year growth.
- The risk and exposure management business continues to face challenges, with growth deceleration and missed expectations.
- Customers are becoming increasingly cautious with investments, leading to extended deal cycles and tighter budget controls.
- The North American mid-market enterprise segment is experiencing slower deal cycles and greater scrutiny.
- The company has adjusted its ARR guidance by lowering the overall range due to increased budgetary uncertainty.
