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 investment analysts at Zacks Research from a "strong-buy" rating to a "hold" rating in a research note issued on Tuesday, August 26th,Zacks.com reports.

A number of other research analysts also recently issued reports on RPD. Wall Street Zen upgraded Rapid7 from a "hold" rating to a "buy" rating in a report on Sunday, August 3rd. Stifel Nicolaus decreased their price objective on Rapid7 from $29.00 to $22.00 and set a "hold" rating for the company in a report on Friday, August 8th. Susquehanna decreased their price objective on Rapid7 from $30.00 to $18.00 and set a "neutral" rating for the company in a report on Monday, August 11th. Piper Sandler decreased their price target on Rapid7 from $35.00 to $30.00 and set a "neutral" rating for the company in a research note on Tuesday, May 13th. Finally, Raymond James Financial decreased their price target on Rapid7 from $40.00 to $30.00 and set an "outperform" rating for the company in a research note on Friday, August 8th. One research analyst has rated the stock with a Strong Buy rating, four have issued a Buy rating, fourteen have given a Hold rating and one has assigned a Sell rating to the company's stock. Based on data from MarketBeat, the company has an average rating of "Hold" and a consensus price target of $26.56.

Rapid7 Stock Down 3.2%

Shares of NASDAQ:RPD traded down $0.66 during mid-day trading on Tuesday, reaching $20.05. 141,144 shares of the stock were exchanged, compared to its average volume of 862,543. The company has a quick ratio of 1.36, a current ratio of 1.36 and a debt-to-equity ratio of 9.84. The company has a market cap of $1.30 billion, a P/E ratio of 48.93 and a beta of 0.94. Rapid7 has a one year low of $17.83 and a one year high of $44.48. The stock's 50 day simple moving average is $21.92 and its 200-day simple moving average is $24.35.

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

Insider Activity at Rapid7

In other Rapid7 news, Director Jana Partners Management, Lp bought 358,738 shares of Rapid7 stock in a transaction dated Monday, August 11th. The stock was bought at an average cost of $18.23 per share, for a total transaction of $6,539,793.74. Following the purchase, the director owned 6,105,148 shares of the company's stock, valued at $111,296,848.04. The trade was a 6.24% increase in their position. The purchase was disclosed in a legal filing with the Securities & Exchange Commission, which is accessible through this hyperlink. Also, CAO Scott M. Murphy sold 1,370 shares of Rapid7 stock in a transaction that occurred on Friday, August 22nd. The stock was sold at an average price of $20.25, for a total value of $27,742.50. Following the transaction, the chief accounting officer owned 27,592 shares of the company's stock, valued at $558,738. This represents a 4.73% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders have bought a total of 772,194 shares of company stock valued at $15,135,356 over the last quarter. 2.40% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Hedge funds and other institutional investors have recently made changes to their positions in the business. Teacher Retirement System of Texas boosted its stake in shares of Rapid7 by 24.1% during the 1st quarter. Teacher Retirement System of Texas now owns 54,091 shares of the technology company's stock worth $1,434,000 after acquiring an additional 10,487 shares during the period. Mirae Asset Global Investments Co. Ltd. lifted its holdings in Rapid7 by 18.5% during the 1st quarter. Mirae Asset Global Investments Co. Ltd. now owns 10,548 shares of the technology company's stock worth $291,000 after purchasing an additional 1,648 shares during the last quarter. New York State Teachers Retirement System acquired a new stake in Rapid7 during the 1st quarter worth approximately $29,000. Invesco Ltd. lifted its holdings in Rapid7 by 5.4% during the 4th quarter. Invesco Ltd. now owns 36,487 shares of the technology company's stock worth $1,468,000 after purchasing an additional 1,860 shares during the last quarter. Finally, Principal Financial Group Inc. lifted its holdings in Rapid7 by 1.1% during the 1st quarter. Principal Financial Group Inc. now owns 54,915 shares of the technology company's stock worth $1,456,000 after purchasing an additional 609 shares during the last quarter. 95.66% of the stock is currently owned by institutional investors.

About Rapid7

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.