RBRK: Revenue Expansion And Margin Gains Will Drive Bullish Repricing

Rubrik's analyst price target has been nudged slightly lower to approximately $114 from about $115, as analysts balance a modestly higher discount rate and slightly slower long term growth assumptions against still robust forecasts for revenue expansion, improving margins, and a series of recent target hikes following strong Q2 results.

Analyst Commentary

Analysts remain generally constructive on Rubrik, highlighting a mix of strong execution, durable growth, and incremental valuation upside, even as some modest caution emerges around the pacing of future expansion and expectations embedded in the stock.

Bullish Takeaways

Bullish analysts emphasize that back to back price target increases, including moves into the $115 to $130 range, signal confidence that Rubrik can sustain premium growth and justify a higher valuation multiple over time.
The sharp revenue acceleration in Q2, with growth materially above consensus and robust subscription ARR trends, is seen as evidence that Rubrik is executing well on demand, sales productivity, and product adoption.
Improving subscription margins and operating leverage are cited as key supports for long term earnings power, giving analysts more conviction that profitability can scale alongside top line expansion.
Some bullish analysts argue that, despite recent gains, shares remain attractive given projected mid 20s to mid 30s revenue growth over the next several years and the companys growing recurring revenue base.

Bearish Takeaways

Bearish analysts point to managements conservative outlook for the next quarter as a sign that growth may normalize from recent highs, which could limit near term upside to estimates and the share price.
There is concern that the very strong Q2 performance and a series of target hikes have raised expectations, leaving less room for execution missteps without triggering valuation compression.
Some cautious views focus on the impact of sales compensation changes and quota structures, noting that transitions in incentives can introduce short term variability in net new recurring revenue trends.
A subset of analysts highlight that as Rubriks growth decelerates from peak levels, the market may scrutinize long term forecasts more closely, putting pressure on management to consistently meet or beat ambitious targets.

What's in the News

Launched Rubrik Agent Cloud, a new platform to monitor, govern, and remediate enterprise AI agents across major clouds and tools, including OpenAI, Microsoft Copilot Studio, and Amazon Bedrock (Key Developments)
Announced Rubrik Agent Cloud for Amazon Bedrock AgentCore, adding monitoring, governance, and rollback of agent actions across multi cloud environments, and achieved the AWS Resilience Software Competency in Recovery (Key Developments)
Expanded Rubrik Agent Cloud to integrate with Microsoft Copilot Studio, enabling discovery, control, and rollback of Copilot based enterprise AI agents across Microsoft 365 (Key Developments)
Introduced new cyber resilience offerings including Rubrik Intelligent Business Recovery for Microsoft 365 and DevOps Protection for Azure DevOps and GitHub to orchestrate business aware recovery after cyberattacks (Key Developments)
Issued updated guidance for fiscal 2026, now expecting full year revenue of $1,227 million to $1,237 million and forecasting third quarter revenue of $319 million to $321 million (Key Developments)

Valuation Changes

The fair value estimate has edged down slightly from approximately $115.20 to about $114.05 per share, reflecting modestly more conservative assumptions.
The discount rate has risen slightly from around 8.39 percent to roughly 8.67 percent, modestly increasing the required return applied to Rubrik's future cash flows.
Revenue growth has eased marginally from roughly 24.87 percent to about 24.17 percent, indicating a slightly slower long term growth outlook.
The net profit margin has improved slightly from about 12.41 percent to approximately 12.70 percent, suggesting a bit more operating leverage and profitability over time.
The future P/E has ticked down marginally from roughly 133.44 times to around 132.88 times, implying a very small reduction in the valuation multiple applied to forward earnings.

Rubrik's innovations and strategic cybersecurity focus enhance market share, revenue growth, and competitive positioning while expanding their total addressable market.
Partnerships and enhanced recovery capabilities leverage enterprise needs, improving customer retention and profitability, fueling earnings growth and expanding their data security footprint.
Economic and competitive pressures, along with uncertainties in AI and cloud strategies, pose risks to Rubrik's revenue growth and financial stability.

Catalysts

About Rubrik

Provides data security solutions to individuals and businesses worldwide.What are the underlying business or industry changes driving this perspective?

Rubrik's strategic focus on cyber resilience, particularly through innovations like their Rubrik Security Cloud and integration with DSPM, positions them strongly against competitors, suggesting potential future gains in market share and revenue growth.
The company's pivotal role at the intersection of data security and AI, especially through products like Annapurna, can expand their total addressable market (TAM), potentially driving future revenue growth and enhancing their market position in this expanding field.
Strategic partnerships, such as with Microsoft, support Rubrik's offerings in Azure and M365 environments, which can foster growth in the adoption of their data security solutions, positively impacting revenue and customer expansion opportunities.
Rubrik's expanded capabilities in identity recovery and Active Directory forest recovery address critical enterprise needs, providing additional avenues for revenue growth by fulfilling emerging market demands, thereby improving customer retention and net retention rates.
Operational efficiencies and improved expense management have led to significant enhancements in subscription ARR contribution margin, which can lead to improved profitability and expectations of higher free cash flow, supporting future earnings growth.

Rubrik Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Rubrik's revenue will grow by 26.2% annually over the next 3 years.
Analysts are not forecasting that Rubrik will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Rubrik's profit margin will increase from -53.7% to the average US Software industry of 13.1% in 3 years.
If Rubrik's profit margin were to converge on the industry average, you could expect earnings to reach $257.3 million (and earnings per share of $1.1) by about September 2028, up from $-524.8 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 130.2x on those 2028 earnings, up from -32.3x today. This future PE is greater than the current PE for the US Software industry at 36.6x.
Analysts expect the number of shares outstanding to grow by 6.52% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.46%, as per the Simply Wall St company report.

Rubrik Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company's reliance on predicting forward-looking statements and market trends could lead to unforeseen material differences, which may affect revenue and earnings if these predictions do not meet expectations.
The aggressive competition in the cyber resilience market, including legacy providers and new-gen alternatives, could hinder market share growth and affect revenue and profitability.
The AI and cloud transformation strategies are still early-stage, and any delays in product-market fit discovery or adoption could impact long-term revenue growth.
Economic factors such as global tariff impacts and overall macroeconomic conditions may shift customer spending priorities away from Rubrik's offerings, potentially affecting revenue projections.
Potential billing duration compression could lead to cash flow challenges, as a shorter billing term might limit upfront cash collection impacting the net margins and financial flexibility.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $112.684 for Rubrik based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $125.0, and the most bearish reporting a price target of just $97.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.0 billion, earnings will come to $257.3 million, and it would be trading on a PE ratio of 130.2x, assuming you use a discount rate of 8.5%.
Given the current share price of $87.72, the analyst price target of $112.68 is 22.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Cyber Resilience And Data Security Will Open New Possibilities