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May 8, 2024 1:12 PM - Davit Kirakosyan
UBS analysts reduced their price target on Rapid7 (NASDAQ:RPD) to $65.00 from $70.00 while maintaining a Buy rating following the company’s reported Q1 earnings, which resulted in a share price drop of more than 4% pre-market today.
The analysts noted that Rapid7 delivered disappointing results for the first quarter of 2024, with its Annual Recurring Revenue (ARR) falling short of expectations at $807 million compared to the consensus estimate of $817 million. Additionally, the company reduced its full-year ARR guidance.
Despite these setbacks, Rapid7's Operating Margin (OpM) exceeded expectations, reaching 20% in the first quarter, and the company reiterated its full-year operating income and Free Cash Flow (FCF) guidance despite the revenue shortfall. The analysts highlighted concerns regarding increased churn in Rapid7's cloud security business and its legacy Vulnerability Management (VM) solutions.
While the downward adjustment in ARR guidance is seen negatively, the analysts suggest that the revised guidance, which sets low expectations for the cloud security business, might be more realistic. They believe some of the issues leading to the disappointing results could be self-inflicted and correctable. With shares currently trading at 3.1 times the 2025 Enterprise Value to Sales (EV/S), the analysts see significant pessimism already reflected in the stock price.
Sep 11, 2023 1:38 PM - Rajnish Katharotiya
Price to Earnings is one of the key metrics use to value companies using multiples. The P/E ratio and other multiples are relative valuation metrics and they cannot be looked at in isolation. One of the problems with the P/E metric is the fact that if we are in the peak of a business cycle, earni...
Sep 11, 2023 1:49 PM - Rajnish Katharotiya
Price-to-Earnings ratio is a relative valuation tool. It is used by investors to find great companies at low prices. In this post, we will build a Python script to calculate Price Earnings Ratio for comparable companies. Photo by Skitterphoto on Pexels Price Earnings Ratio and Comparable Compa...
Nov 25, 2023 6:39 AM - Parth Sanghvi
Choosing the Right Valuation Method: DCF vs. Comparable Companies Analysis Introduction: Valuation methods play a pivotal role in determining the fair value of a company, aiding investors in making informed investment decisions. Two commonly used methods, DCF Valuation and Comparable Companies A...