Rapid7 Inc Dossier - Source-backed chat

Rapid7 Inc

RPDNASDAQ

SectorInformation Technology

IndustrySystems Software

Beta (adjusted)0.96

Intrinsic Value $21.70median of 5 methods · middle span $13-$42based on filings through 30 Jun 2026

Market Price $12.06Price as of 1 Oct 2026

Significantly undervaluedIntrinsic value is 80% above the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

marker beyond scale (+80%)

Data confidence Sign in to view data confidence

Market Cap $812.9M

Enterprise Value $683.3M

Shares Outstanding 68M diluted

Moat Rating Wide

Next Earnings Date3 Nov 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Rapid7 is undergoing a critical operational and strategic transition. While the company continues to demonstrate solid cost discipline, margin expansion, and healthy free cash flow generation, it faces near-term top-line headwinds. Annual Recurring Revenue (ARR) has experienced its first year-over-year contraction, driven by weakness in non-core standalone products. The company is pivoting toward its 'Preemptive MDR' strategy and integrating agentic AI capabilities via the March 2026 acquisition of Kenzo Security. Furthermore, a major leadership transition occurred on June 1, 2026, with board member Wael Mohamed taking over as CEO while long-time CEO Corey Thomas transitioned to Executive Chairman. Given the flat-to-declining near-term revenue outlook and execution risks surrounding the platform transition, a Hold recommendation is appropriate until ARR stabilizes and the new leadership team proves its execution capabilities.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets21 analysts · as of 18 Aug 2026

Low · most bearish analyst$6.00

Mean target$8.10

High · most bullish analyst$13.00

Street targets sit below today's price; our intrinsic value sits above it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 19 Jun 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$5.5015%

The decline in non-core standalone products accelerates faster than core platform growth can offset, leading to deeper ARR contraction below the guided $820 million. Intense competition from larger platform players (e.g., Palo Alto Networks, Microsoft, Tenable) pressures pricing and limits new customer acquisition. Sales execution falters during the leadership transition, causing free cash flow generation to miss the lower bound of the guided range.

Base CaseCentral scenario

$7.3060%

Rapid7 executes in line with its reaffirmed FY 2026 guidance, delivering revenue of $836 million to $842 million and free cash flow of $125 million to $135 million. Core Detection and Response ARR continues to grow at a mid-single-digit rate, offsetting the planned wind-down of non-core standalone products. The leadership transition under Wael Mohamed proceeds smoothly without major sales disruption, keeping the stock valued close to its current multiples.

Bull CaseUpside scenario

$10.0025%

The integration of Kenzo Security's agentic AI technology successfully accelerates Rapid7's Command Platform, driving rapid adoption of its Preemptive MDR services. Operating margins expand faster than expected due to offshore leverage from the India Global Capability Center and strict cost controls. Private equity interest, which has historically circled low-growth security software firms with strong cash flows, materializes into an acquisition offer at a premium.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Strong free cash flow generation, with FY 2026 guidance of $125 million to $135 million representing a highly resilient cash conversion profile.
Strategic pivot to Agentic AI and Preemptive MDR through the acquisition of Kenzo Security, which automates up to 100% of alert investigations and reduces triage time by 94%.
Improving operating leverage and cost discipline, leading to an upward revision of full-year non-GAAP operating income guidance to $112 million - $118 million.
Stable core customer spend, with ARR per customer holding steady at approximately $72,000.

Key Investment Risks

Top-line contraction, with FY 2026 revenue guided to decline 2% to 3% year-over-year due to legacy product headwinds.
Intense competitive landscape in vulnerability management and managed detection and response from larger, well-capitalized security suite vendors.
Execution and transition risks associated with the sudden appointment of Wael Mohamed as CEO on June 1, 2026.
High debt-to-equity ratio and net debt position of approximately -$295 million, which could limit capital allocation flexibility.

Thesis Invalidation Triggers

Q2 2026 ending ARR falling significantly below the guided $820 million.
A downward revision of the full-year 2026 free cash flow guidance of $125 million to $135 million.
Elevated customer churn or sales force disruption following the leadership transition.
A major security breach or failure in Rapid7's threat intelligence and MDR systems that damages brand reputation.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.