Financial Analysis: Rapid7 (NASDAQ:RPD) vs. Its Rivals

Rapid7 (NASDAQ: RPD) is one of 120 public companies in the “Software” industry, but how does it contrast to its competitors? We will compare Rapid7 to related companies based on the strength of its risk, valuation, analyst recommendations, profitability, dividends, institutional ownership and earnings.

Profitability

This table compares Rapid7 and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rapid7 -23.67% -98.26% -16.93%
Rapid7 Competitors -44.78% -40.38% -10.06%

Insider & Institutional Ownership

70.9% of Rapid7 shares are held by institutional investors. Comparatively, 57.9% of shares of all “Software” companies are held by institutional investors. 56.9% of Rapid7 shares are held by company insiders. Comparatively, 19.7% of shares of all “Software” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations for Rapid7 and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rapid7 0 1 7 0 2.88
Rapid7 Competitors 274 2064 4369 86 2.63

Rapid7 presently has a consensus price target of $20.56, indicating a potential upside of 13.73%. As a group, “Software” companies have a potential upside of 3.32%. Given Rapid7’s stronger consensus rating and higher probable upside, equities analysts plainly believe Rapid7 is more favorable than its competitors.

Volatility & Risk

Rapid7 has a beta of 0.64, suggesting that its stock price is 36% less volatile than the S&P 500. Comparatively, Rapid7’s competitors have a beta of 0.98, suggesting that their average stock price is 2% less volatile than the S&P 500.

Valuation & Earnings

This table compares Rapid7 and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Rapid7 $178.06 million -$36.89 million -18.08
Rapid7 Competitors $1.49 billion $438.71 million 40.69

Rapid7’s competitors have higher revenue and earnings than Rapid7. Rapid7 is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

About Rapid7

Rapid7, Inc. is a provider analytics for security and information technology (IT) operations that enable organizations to implement an analytics-driven approach to cyber security and IT operations. The Company’s analytics enable organizations to contextualize and prioritize the threats facing their physical, virtual and cloud assets, including those posed by the behaviors of their users. Leveraging its IT data and analytics platform, its solutions enable organizations to manage their cyber security exposure and manage IT operations. Its solutions empower organizations to prevent attacks by providing visibility into vulnerabilities, and allow them to detect compromises, respond to breaches and correct the underlying causes of attacks. By providing a unified IT and security platform, with automated workflow, it enables IT and security to work together to develop, operate and secure their environment.

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