Zacks Research Downgrades Rapid7 (NASDAQ:RPD) to Hold

Key Points

• Rapid7 has been downgraded by Zacks Research from a "strong-buy" to a "hold" rating, reflecting a shift in investor sentiment.
• Multiple brokerages have recently reduced their price targets for Rapid7, with Scotiabank lowering its target from $29.00 to $20.00.
• The company's earnings report revealed a net margin of 3.41% and a significant return on equity at 149.12%, despite a challenging market environment.

Rapid7 (NASDAQ:RPD - Get Free Report) was downgraded by research analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a research report issued on Tuesday,Zacks.com reports.

Other equities research analysts also recently issued research reports about the stock. Susquehanna dropped their price target on shares of Rapid7 from $30.00 to $18.00 and set a "neutral" rating on the stock in a research note on Monday, August 11th. UBS Group decreased their price objective on shares of Rapid7 from $39.00 to $34.00 and set a "buy" rating for the company in a report on Friday, August 8th. Morgan Stanley raised their price objective on shares of Rapid7 from $26.00 to $28.00 and gave the stock an "equal weight" rating in a report on Tuesday, May 13th. Citigroup decreased their price objective on shares of Rapid7 from $35.00 to $30.00 and set a "buy" rating for the company in a report on Monday, August 18th. Finally, Canaccord Genuity Group decreased their price objective on shares of Rapid7 from $39.00 to $32.00 and set a "hold" rating for the company in a report on Monday, August 11th. One investment analyst has rated the stock with a Strong Buy rating, four have given a Buy rating, fourteen have assigned a Hold rating and one has issued a Sell rating to the company. According to MarketBeat.com, Rapid7 presently has a consensus rating of "Hold" and an average price target of $26.89.

Rapid7 Price Performance

RPD stock traded down $0.19 on Tuesday, reaching $20.71. The company had a trading volume of 778,094 shares, compared to its average volume of 987,683. Rapid7 has a 1 year low of $17.83 and a 1 year high of $44.48. The company has a debt-to-equity ratio of 9.84, a quick ratio of 1.36 and a current ratio of 1.36. The company's fifty day moving average is $21.97 and its 200 day moving average is $24.46. The company has a market cap of $1.34 billion, a P/E ratio of 50.51 and a beta of 0.94.

Rapid7 (NASDAQ:RPD - Get Free Report) last issued its quarterly earnings results on Thursday, August 7th. The technology company reported $0.58 earnings per share for the quarter, beating the consensus estimate of $0.44 by $0.14. Rapid7 had a return on equity of 149.12% and a net margin of 3.41%.The company had revenue of $214.19 million during the quarter, compared to the consensus estimate of $212.17 million. During the same period in the previous year, the firm posted $0.58 EPS. Rapid7's revenue was up 3.0% on a year-over-year basis. Rapid7 has set its FY 2025 guidance at 1.900-2.030 EPS. Q3 2025 guidance at 0.440-0.470 EPS. On average, research analysts forecast that Rapid7 will post 0.35 earnings per share for the current year.

Insider Transactions at Rapid7

In related news, CAO Scott M. Murphy sold 1,370 shares of the stock in a transaction dated Friday, August 22nd. The shares were sold at an average price of $20.25, for a total value of $27,742.50. Following the sale, the chief accounting officer owned 27,592 shares of the company's stock, valued at $558,738. This trade represents a 4.73% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, Director Jana Partners Management, Lp acquired 250,000 shares of the company's stock in a transaction that occurred on Wednesday, August 13th. The stock was purchased at an average cost of $21.26 per share, for a total transaction of $5,315,000.00. Following the acquisition, the director owned 6,518,604 shares in the company, valued at approximately $138,585,521.04. This trade represents a 3.99% increase in their ownership of the stock. The disclosure for this purchase can be found here. In the last ninety days, insiders purchased 772,194 shares of company stock worth $15,135,356. Corporate insiders own 2.40% of the company's stock.

Institutional Trading of Rapid7

A number of large investors have recently modified their holdings of RPD. New York State Teachers Retirement System bought a new position in Rapid7 in the 1st quarter valued at about $29,000. BI Asset Management Fondsmaeglerselskab A S bought a new position in Rapid7 in the 1st quarter valued at about $38,000. Versant Capital Management Inc grew its position in Rapid7 by 5,311.1% in the 1st quarter. Versant Capital Management Inc now owns 1,461 shares of the technology company's stock valued at $39,000 after buying an additional 1,434 shares in the last quarter. Headlands Technologies LLC bought a new position in Rapid7 in the 2nd quarter valued at about $44,000. Finally, DekaBank Deutsche Girozentrale bought a new position in Rapid7 in the 1st quarter valued at about $74,000. Institutional investors and hedge funds own 95.66% of the company's stock.

Rapid7 Company Profile

Rapid7, Inc provides cybersecurity solutions under the Rapid7, Nexpose, and Metasploit brand names. The company offers endpoint to cloud data collection and sharing applications, such as Rapid7 Insight Agent, a software-based agent that is used on assets across on-premises and cloud environments to centralize and monitor data on company's platform; Rapid7 Insight Network Sensor that analyzes raw end-to-end network traffic to increase visibility into user activity, pinpoint real threats, and investigations; Rapid7 Cloud Event Data Harvesting that offers visibility into changes made to cloud resources; and third-party integrations and ecosystem, as well as orchestration and automation solutions.