Rapid7 (RPD) Stock Forecast & Price Target

Rapid7's revenue of $218 million grew by 1.5% year-over-year and 3% quarter-over-quarter, indicating a consistent financial performance that exceeds midpoint expectations. The company's Annual Recurring Revenue (ARR) reached $838 million, reflecting a year-over-year growth of 1.8%, and a stable customer growth rate of 1.8% suggests a solid foundation for ongoing expansion. Additionally, strong demand for Detection and Response (D&R) products, which comprise over 50% of ARR, alongside a promising pipeline of larger deals, positions Rapid7 for potentially accelerated revenue growth in the future.

Rapid7 has lowered its ARR guidance by approximately $20 million, now projecting zero net new ARR for the fourth quarter, which reflects a need to de-risk expectations amid leadership changes. The company reported a sequential decline in ARR for the third quarter, exiting with $837.7 million, which fell short of consensus expectations and resulted in a reset of growth projections for FY25 to flat year-over-year performance. Additionally, ongoing challenges in Exposure Management, including execution shortfalls and extended deal cycles, have further pressured growth expectations and profitability metrics, leading to a revised revenue outlook for FY25.