Investment analysts at Wall Street Zen have downgraded shares of Rapid7 (NASDAQ:RPD) from a “buy” rating to a “hold” rating. This change, announced in a note to investors on Saturday, reflects a broader reassessment of the company’s stock amidst mixed signals from various financial institutions.
In recent days, multiple analysts have provided updated ratings on Rapid7. Weiss Ratings reaffirmed a “sell (d+)” rating in a research note earlier in the week. Meanwhile, Zacks Research upgraded the company from “hold” to “strong-buy” on October 14, 2023. Truist Financial adjusted its price target for Rapid7 from $22.00 to $18.00, maintaining a “hold” rating. Similarly, UBS Group lowered its target price from $34.00 to $29.00 while still recommending a “buy” rating. Morgan Stanley also revised its price target down from $28.00 to $22.00, assigning an “equal weight” rating.
As a result of these evaluations, the current consensus rating for Rapid7 stands at “hold,” with a target price averaging $22.78. Analysts’ assessments vary, with two rating the stock as “strong buy,” four as “buy,” thirteen as “hold,” and two as “sell.”
Stock Performance and Financial Results
On Friday, Rapid7’s stock opened at $14.20. Over the past year, the stock has reached a low of $13.97 and a high of $44.48. The company maintains a market capitalization of approximately $919.39 million and a price-to-earnings ratio of 34.63. Recent financial performance includes a reported earnings per share (EPS) of $0.57 for the quarter ending November 4, 2023, surpassing analyst expectations of $0.45 by $0.12. The company generated revenue of $217.96 million, slightly exceeding projections of $216.14 million.
Despite the positive EPS report, Rapid7’s quarterly revenue represented only a 1.5% increase compared to the same period in the previous year, down from $0.66 EPS a year ago. The company has projected its fiscal year 2025 EPS guidance between $2.020 and $2.090, with fourth-quarter guidance set between $0.370 and $0.44 EPS.
Insider Trading and Institutional Holdings
Recent insider activity has also drawn attention. Chief Accounting Officer Scott M. Murphy sold 1,370 shares of Rapid7 at an average price of $20.25, totaling $27,742.50. Following this sale, Murphy’s ownership decreased by 4.73%. Conversely, Jana Partners Management, Lp acquired 250,000 shares at an average price of $21.26, amounting to approximately $5.32 million, which increased their ownership in the company.
Overall, insiders have purchased 772,194 shares valued at $15.14 million over the past three months. Currently, insiders hold 2.40% of the company’s stock.
Institutional investors are also reshaping their positions in Rapid7. Notably, the New York State Teachers Retirement System initiated a new position valued at around $29,000. The Teacher Retirement System of Texas increased its stake by 24.1%, acquiring an additional 10,487 shares, bringing its total to 54,091 shares valued at $1.43 million. Other institutional changes include DekaBank Deutsche Girozentrale acquiring a new position valued at approximately $74,000, and Victory Capital Management Inc. raising its position by 20.3%.
Currently, institutional investors own 95.66% of Rapid7’s stock, indicating strong institutional confidence in the company despite the recent fluctuations in analyst ratings.
Rapid7 continues to be a significant player in the cybersecurity space, delivering solutions under its well-known brands, including Rapid7, Nexpose, and Metasploit. The company is focused on providing comprehensive data collection and sharing applications, enhancing visibility into user activity and potential threats across various environments.
