Rapid7 (RPD) Stock Forecast & Price Target

Rapid7 has demonstrated resilience in its financial performance, with a notable year-over-year revenue increase of 1.5% to $218 million, surpassing midpoint expectations. The company's robust growth in the Detection & Response segment, contributing over 50% of Annual Recurring Revenue (ARR) at more than $419 million, underscores its stable foundation as it seeks to enhance its Exposure Management offerings. Moreover, positive demand signals, including a promising pipeline of larger deals and an improving outlook for IT budgets, suggest potential for accelerated revenue growth beyond current forecasts.

The recent financial report highlights significant challenges for Rapid7, including a lowered Annual Recurring Revenue (ARR) guidance of approximately $20 million and a stagnation of New Net Annual Recurring Revenue (NNARR) expected for the fourth quarter. The company experienced a sequential decline in ARR during the third quarter, finishing at $837.7 million, which fell short of consensus expectations, and revised its 2025 ARR guidance down to flat year-over-year at $838 million. Additionally, prolonged deal cycles and strategic execution issues in its Exposure Management segment have contributed to a negative outlook on growth and profitability, prompting management to lower revenue guidance for FY25.