Why Rapid7 (RPD) Shares Are Falling Today

Adam Hejl /
2023/05/10 9:02 am EDT

What Happened:

Shares of cybersecurity software maker Rapid7 (NASDAQ:RPD) fell 5.08% in the afternoon session after the company reported first-quarter results that exceeded analysts' revenue, and earnings per share estimates. Annual recurring revenue (ARR) was inline, and cash burn improved. However customer growth decelerated. In addition, revenue guidance for the next quarter was increased slightly but came in below Consensus. The full-year ARR and free cash flow guidance was maintained and roughly inline. This guidance assumes some ongoing macro headwinds as well as progress in sales execution initiatives that the company has been focused on.

What is the market telling us:

Rapid7's shares are quite volatile and over the last year have had 42 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business. The previous big move was about one month ago, when the company gained 6.87% on the news that the company's board may have picked a preferred bidder amid takeover chatter. In January, Reuters reported that the company was in the early stages of considering a potential sale and had sought Goldman Sachs for guidance.

Rapid7 is up 27% since the beginning of the year, but at $44.39 per share it is still trading 40.2% below its 52-week high of $74.29 from July 2022. Investors who bought $1,000 worth of Rapid7's shares 5 years ago would now be looking at an investment worth $1,380.

Is now the time to buy Rapid7? Access our full analysis of the earnings results here, it's free.