Last Update 25 Mar 26

Fair value Decreased 14%

RBRK: Identity Resilience And AI Operations Will Support Cyber Recovery Upside

Narrative Update

The updated analyst price target for Rubrik moves lower to $86.71 from $100.52, as analysts factor in slightly softer revenue growth, modestly lower profit margin assumptions, and a reduced future P/E multiple, despite continued positive commentary around Q4 execution, subscription ARR strength, and the long term opportunity in cyber resilience and identity security.

Analyst Commentary

Recent Street research presents a mixed picture for Rubrik, with many firms cutting price targets while keeping positive ratings and pointing to solid execution around Q4 results, subscription ARR, and longer term opportunities in cyber resilience and identity security.

Bullish Takeaways

Bullish analysts highlight Rubrik's Q4 results and Q1/2027 outlook as better than third party consensus, viewing this as support for theses built around durable revenue, record net new ARR, and improving profitability and free cash flow.
There is consistent emphasis on the 2027 annual recurring revenue outlook, which several firms describe as ahead of their prior expectations, with some seeing potential upside to fiscal 2027 ARR estimates after updating models post Q4.
Execution in newer areas such as identity security, AI operations, and the Agent Cloud offering is seen as expanding Rubrik's addressable opportunity beyond core backup and recovery, with some checks pointing to strong traction and healthy large deal activity.
Several bullish analysts reference continued competitive displacements, strong subscription ARR, and robust cross sell into identity and SaaS apps as reasons to maintain positive ratings even as targets reset.

Bearish Takeaways

Despite constructive views on execution, many analysts have reduced price targets, citing sector wide software multiple compression and lower peer valuation multiples as key inputs to their revised Rubrik target ranges.
Some bearish analysts point to incremental caution on security budgets, macro concerns, and AI related sentiment in software, which they say has hurt sector valuations and contributed to more conservative Rubrik assumptions.
There are references to competitive concerns and partner feedback about Rubrik shifting more business to hyperscalers or lower margin partners, which could pressure profitability assumptions if that mix persists.
While Q4 checks and results are generally described as solid or better, several firms position their target cuts as a recalibration of multiples and risk perceptions rather than a revision to the underlying operational story, which may limit upside expectations in the near term.

What's in the News

Rubrik introduced its Semantic AI Governance Engine (SAGE), described as the data security industry’s first AI governance engine aimed at securing and controlling autonomous agents in real time. It is powered by a proprietary Small Language Model that interprets policy intent and supports automated remediation through Rubrik Agent Rewind. (Product related announcement)
The company announced a new integration with Microsoft Defender at RSAC 2026, connecting Microsoft’s identity threat detection with Rubrik’s automated identity rollback and recovery to support faster response to identity based attacks across hybrid environments. (Client announcement)
Rubrik launched Data Protection for Google Workspace, targeting more than 11m enterprises using Google Drive and Gmail with immutable backups, policy driven SLAs, and rapid recovery to support end to end cyber resilience. (Client announcement)
New capabilities across Rubrik Security Cloud and the partner program were introduced for Managed Service Providers, including PayGo consumption based licensing, 24/7 incident response support, a modernized MSP tiering structure, and the Rubrik Verified maturity designation. (Product related announcement)
Rubrik and Rackspace Technology announced the UK Sovereign Cyber Recovery Cloud, a ransomware recovery solution that keeps sensitive data and operations within UK borders and provides an isolated cyber recovery environment designed to support local regulatory requirements. (Product related announcement)

Valuation Changes

Fair Value: Reduced from $100.52 to $86.71, representing a meaningful reset to the modelled upside.
Discount Rate: Adjusted slightly higher from 8.78% to 8.81%, indicating a modestly higher required return assumption.
Revenue Growth: Trimmed from 22.46% to 21.46%, reflecting slightly softer top line expectations.
Net Profit Margin: Lowered from 11.73% to 11.41%, indicating a small pullback in long term profitability assumptions.
Future P/E: Reduced from 117.51x to 95.90x, indicating a less aggressive multiple applied to future earnings.

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Key Takeaways

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 21.5% 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 -26.5% to the average US Software industry of 11.4% in 3 years.
If Rubrik's profit margin were to converge on the industry average, you could expect earnings to reach $269.1 million (and earnings per share of $1.16) by about March 2029, up from -$348.8 million today.
In order for the above numbers to justify the price target of the analysts, the company would need to trade at a PE ratio of 95.9x on those 2029 earnings, up from -27.9x today. This future PE is greater than the current PE for the US Software industry at 28.3x.
Analysts expect the number of shares outstanding to grow by 4.54% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.81%, as per the Simply Wall St company report.

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 $86.71 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 $126.0, and the most bearish reporting a price target of just $64.0.
In order for you to agree with the analysts, you'd need to believe that by 2029, revenues will be $2.4 billion, earnings will come to $269.1 million, and it would be trading on a PE ratio of 95.9x, assuming you use a discount rate of 8.8%.
Given the current share price of $48.07, the analyst price target of $86.71 is 44.6% 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