What Happened:
Shares of cybersecurity software maker Rapid7 (NASDAQ:RPD) fell 5.9% in the morning session after competitor, Tenable (TENB) reported first-quarter revenue that narrowly beat analysts' expectations, although free cash flow missed. Also, sales guidance for the next quarter and full year fell short of the consensus estimates, which are major negatives for fast-growing SaaS stocks.
What is the market telling us:
Rapid7's shares are quite volatile and over the last year have had 44 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 21 days 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 37.2% since the beginning of the year, but at $48.04 per share it is still trading 55.3% below its 52-week high of $107.49 from April 2022. Investors who bought $1,000 worth of Rapid7's shares 5 years ago would now be looking at an investment worth $1,750.
Is now the time to buy Rapid7? Access our full analysis of the earnings results here, it's free.