Investing.com -- Wolfe Research initiated coverage of Rubrik with an Outperform rating and a $70 price target on Friday, arguing the cloud-native data security company is well positioned at the intersection of two of software's most critical categories.

Analyst Patrick O'Neil set the price target based on 7.5 times calendar year 2027 EV/Sales and 36 times free cash flow, citing Rubrik's Zero Trust architecture and its growing role in enterprise cyber resilience as key differentiators.

Wolfe traced the data backup and recovery market from its origins in floppy disks and physical tapes to its current form, shaped by cloud architectures, SaaS proliferation and a rapidly expanding cyber threat landscape.

O'Neil said that evolution has made traditional backup concepts obsolete and elevated the need for platforms like Rubrik's.

The firm expressed confidence in Rubrik's ability to sustain 30%-plus subscription ARR growth this year, with durable growth in the high-20% range in subsequent years.

Wolfe projects subscription ARR growth of roughly 32% year over year for fiscal 2027, ahead of the company's own guidance of approximately 25%.

Identity Security offerings are seen as a meaningful contributor, with Wolfe estimating the segment could at least double its roughly $30 million NNARR contribution from last year.

"Rubrik clearly belongs in the AI winners category (alongside names like DDOG, SNOW, CRWD, NET, and others) and carry the premium valuation that comes with it," O'Neil wrote.

Wolfe sees AI deployments driving data volume growth and heightening demand for cyber resilience tools as a key long-term tailwind.