Does Rubrik’s Cloud Security Partnership Signal a New Value Opportunity in 2025?

• Wondering if Rubrik is a hidden gem or overpriced? You are not alone. Many investors want to know if now is the right moment to take a closer look.
• The stock’s journey has been lively, gaining 2.9% over the last week after a recent dip of -7.9% in the past month. It is still up 40.2% over the last year.
• Recent news headlines about Rubrik have centered on its partnerships in the cloud security space and fresh product announcements. Both of these factors have fueled optimism and, at times, market uncertainty. This buzz has clearly influenced how investors perceive its prospects in a fast-moving tech landscape.
• When it comes to valuation, Rubrik scores just 2 out of 6 on our key valuation checks, signaling there is more digging to do. Next, we will break down how traditional methods stack up. Keep reading, because the most insightful way to truly value Rubrik is still to come.

Rubrik scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Rubrik Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future free cash flows and then discounting those amounts back to today's dollars. This approach helps investors gauge what the business could be worth based on its ability to generate cash over time.

For Rubrik, the most recent available free cash flow is $174.88 million. Analyst-driven estimates project that this number will steadily increase, reaching approximately $765.9 million by 2030. Forecasts cover the next five years with analyst input, while years beyond 2030 are extrapolated to reflect continued growth trends. All cash flows are reported in US dollars ($).

Applying the 2 Stage Free Cash Flow to Equity methodology, Simply Wall St calculates Rubrik's intrinsic value at $82.92 per share. At this level, Rubrik stock is considered 16.4% undervalued compared to its current trading price.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Rubrik is undervalued by 16.4%. Track this in your watchlist or portfolio, or discover 916 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Rubrik.

Approach 2: Rubrik Price vs Sales

The Price-to-Sales (P/S) ratio is a popular metric for valuing growing technology companies like Rubrik. It is particularly useful when these companies are prioritizing rapid revenue expansion over profitability. This metric provides a snapshot of how much investors are willing to pay for each dollar of the company's sales, making it especially relevant when earnings are either negative or not the main focus.

Growth expectations and risk play a significant role in determining what a “normal” or “fair” P/S ratio should be. Higher growth prospects or lower business risk typically support a higher multiple, while slower growth or higher uncertainty usually result in a lower ratio.

Currently, Rubrik trades at a P/S ratio of 12.64x, which is higher than both its peer average of 8.81x and the broader software industry average of 4.86x. However, these benchmarks do not fully account for Rubrik’s specific combination of growth drivers, profit margins, market capitalization, and company-specific risks.

Simply Wall St’s proprietary “Fair Ratio” seeks to address this. The Fair Ratio synthesizes key fundamentals such as Rubrik’s projected sales growth, profit margins, scale, and risk factors to develop a tailored multiple. Unlike standard comparisons, this approach provides a more nuanced perspective on what the market might reasonably pay for Rubrik’s shares.

According to these calculations, Rubrik’s Fair Ratio is estimated at 9.77x. Since the company’s actual P/S multiple is significantly above this figure, the stock appears overvalued on a sales basis based on this metric.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1441 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Rubrik Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is the story behind the numbers, your unique view on what drives Rubrik's future, such as its competitive strengths, growth challenges, and how these may influence things like revenue, profit margins, and ultimately, what you believe the fair value should be.

Narratives bridge company insights and financial forecasts, helping you connect your perspective with a tailored fair value. They are designed to be quick and approachable; millions of investors use Narratives on Simply Wall St’s Community page to track and update their investment thinking in real time.

By comparing the fair value from your Narrative with Rubrik’s current price, you can make more informed buy or sell decisions that truly reflect your expectations. Narratives are updated as soon as fresh company developments, results, or big news emerge, so your investment view always stays current.

For example, taking Rubrik, one investor might see strong AI partnerships and strategic cloud security moves justifying a fair value as high as $125.00, while another might focus on industry risks or slower profit improvement, seeing fair value closer to $97.00. That’s the power of Narratives, investment decisions grounded in your own research, backed by data, and always up to date.

Do you think there's more to the story for Rubrik? Head over to our Community to see what others are saying!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com