Barclays Downgrades Rapid7 (RPD) to Underweight

Barclays analyst Saket Kalia downgraded Rapid7 (NASDAQ: RPD) from Equalweight to Underweight with a price target of $15.00 (from $18.00).

The analyst comments: "We are downgrading RPD to Underweight (from Equal Weight) for three reasons: (1) the vulnerability management market is growing slower than overall cyber-security as prioritization of VM in our CIO surveys have ticked down, with arguably increased competition as we show in the table below; (2) RPD generates ~45% of ARR from VM and ~45% from Detection & Response (D&R), with legacy products (like Metasploit) generating the remaining ~10% – the opportunity with RPD will be the mix shift towards D&R, but we think that will take time; and (3) the stock is cheap, in our view, and while there have been public M&A headlines on RPD, we think the mix shift will be key in driving a re-rating, but that will not happen overnight. We trim our ARR estimates, fine-tune our opex seasonality, and lower our PT to $15."

For an analyst ratings summary and ratings history on Rapid7 click here. For more ratings news on Rapid7 click here.

Shares of Rapid7 closed at $14.27 yesterday.

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