Cybersecurity software maker Rapid7 (NASDAQ:RPD) will be reporting earnings tomorrow after market close. Here’s what to look for.
Rapid7 beat analysts’ revenue expectations by 1.9% last quarter, reporting revenues of $208 million, up 9.2% year on year. It was a mixed quarter for the company, with accelerating customer growth but underwhelming earnings guidance for the next quarter. It added 22 customers to reach a total of 11,484.
Is Rapid7 a buy or sell going into earnings? Read our full analysis here, it’s free.
This quarter, analysts are expecting Rapid7’s revenue to grow 5.7% year on year to $210.1 million, slowing from the 13.1% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $0.52 per share.
The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Rapid7 has only missed Wall Street’s revenue estimates once over the last two years, exceeding top-line expectations by 1.3% on average.
Looking at Rapid7’s peers in the cybersecurity segment, some have already reported their Q3 results, giving us a hint as to what we can expect. Tenable delivered year-on-year revenue growth of 12.7%, beating analysts’ expectations by 1.7%, and Varonis reported revenues up 21.1%, topping estimates by 4.7%. Tenable’s stock price was unchanged after the results, and Varonis’s price followed a similar reaction.
Read our full analysis of Tenable’s results here and Varonis’s results here.
There has been positive sentiment among investors in the cybersecurity segment, with share prices up 5.8% on average over the last month. Rapid7 is up 2.8% during the same time and is heading into earnings with an average analyst price target of $43.94 (compared to the current share price of $39.50).
When a company has more cash than it knows what to do with, buying back its own shares can make a lot of sense–as long as the price is right. Luckily, we’ve found one, a low-priced stock that is gushing free cash flow AND buying back shares. Click here to claim your Special Free Report on a fallen angel growth story that is already recovering from a setback.