A Fresh Look at Rapid7 (RPD) Valuation Following Prolonged Share Price Decline

Rapid7 (RPD) shares slipped 1% today, continuing a downward trend that started earlier this year. The stock is now down over 50% year to date, reflecting persistent challenges in the cybersecurity sector.

See our latest analysis for Rapid7.

Rapid7’s share price continues to lose steam, with a 1-day decline of 1.3% and a year-to-date plunge of nearly 52%. Despite a small uptick last week, momentum remains negative, and the total shareholder return over the past year has dropped just over 51%, deepening longer-term losses. At current levels, investors appear to be reassessing growth prospects and risk across cybersecurity firms.

If you’re looking to discover opportunities outside of the current cybersecurity shakeup, now is a good time to broaden your search and explore fast growing stocks with high insider ownership

With Rapid7 trading at a significant discount to analyst price targets, investors are left wondering whether the recent slide is an opportunity to buy in at a bargain or if the market is simply pricing in muted future growth.

Most Popular Narrative: 23.3% Undervalued

Rapid7’s most widely followed valuation narrative places its fair value comfortably above the last close. This suggests analysts see potential for a substantial rebound. The current gap between market sentiment and this projection creates an interesting discussion about growth drivers the market may be underestimating.

Rapid7's unified Command platform and MDR-led solutions are increasingly winning larger, strategic consolidation deals as enterprises seek to reduce fragmentation and simplify compliance in complex, highly regulated environments. This points to an expanding addressable market, higher average revenue per customer, and sustained revenue growth opportunity.

Read the complete narrative.

Curious what’s fueling this optimistic outlook? The narrative hinges on bold assumptions for margin expansion, recurring SaaS revenue, and the long-term payoff from AI-infused platform plays. Only the full breakdown reveals which forecasts tip the scales so sharply. Don’t miss the details analysts are betting on.

Result: Fair Value of $24.66 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, longer deal cycles and persistent challenges in legacy product growth could undermine analysts' optimism and limit Rapid7’s ability to deliver consistent upside.

Find out about the key risks to this Rapid7 narrative.

Another View: High Earnings Multiple Sets a Challenge

On the other hand, Rapid7 trades at a price-to-earnings ratio of 43.7x, which is above both its industry average (34.3x), the peer group average (41.6x), and the fair ratio indicated by market analysis (35.3x). This premium suggests investors are baking in higher growth or margin improvements than the market expects. Can actual results justify the lofty valuation, or is there a risk the multiple will need to come down?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Rapid7 Narrative

If you’d rather take a hands-on approach or question the current outlook, you can easily analyze the numbers yourself and shape your own perspective in just a few minutes. Do it your way.

A great starting point for your Rapid7 research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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