📊 RPD Key Takeaways
Is RPD a Good Investment? Thesis Analysis
Rapid7 demonstrates solid financial health with strong free cash flow generation ($146.2M), minimal debt, and substantial cash reserves, but faces significant headwinds: stagnant revenue growth (1.9% YoY) combined with declining earnings (-8.4% YoY) and critically low operating margins (1.3%) indicate structural profitability challenges that outweigh balance sheet strengths.
Rapid7 generates strong free cash flow on high gross margins with minimal leverage, but revenue growth has slowed and GAAP profitability remains thin with declining EPS. Liquidity is adequate, yet the small equity base versus large liabilities reduces resilience. Waiting for sustained margin expansion alongside a reacceleration in growth is prudent.
Why Buy RPD? Key Strengths
- Exceptional free cash flow generation ($146.2M, 17% margin) far exceeds accounting profits, indicating high-quality earnings and strong underlying cash generation
- Fortress balance sheet with minimal leverage (0.09x debt/equity), $246.7M cash position, and low capital requirements typical of software businesses
- Healthy gross margin of 70.3% demonstrates strong underlying software unit economics and pricing power
- Strong free cash flow (17% FCF margin)
- High gross margin (70.3%) supporting scalability
- Low leverage with cash exceeding long-term debt; acceptable interest coverage
RPD Investment Risks to Consider
- Critical operating margin of only 1.3% on $604.8M gross profit signals severe operating expense management issues; unusual for software companies and suggests structural cost challenges
- Anemic revenue growth of 1.9% YoY combined with declining net income (-8.4% YoY) indicates lack of growth momentum and deteriorating profitability despite top-line expansion
- Large gap between gross profit and operating income ($593.2M in expenses) suggests high R&D, sales, or administrative costs that may not be generating proportional returns
- Muted top-line growth (+1.9% YoY)
- Very thin operating margin (1.3%) and EPS down 10%
- Small equity base vs. liabilities limits shock absorption
Key Metrics to Watch
- Operating margin trend and path to profitability improvement
- Revenue growth acceleration and customer acquisition rates
- Reconciliation of strong FCF with declining net income and low operating margins
- Operating margin
- Revenue growth YoY
RPD Financial Metrics
💡 AI Analyst Insight
Rapid7, Inc. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
RPD Profitability Ratios
RPD vs Technology Sector
How Rapid7, Inc. compares to Technology sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is RPD Overvalued or Undervalued?
Based on fundamental analysis, Rapid7, Inc. has mixed fundamental signals relative to the Technology sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
RPD Balance Sheet & Liquidity
RPD 5-Year Financial Trend & Growth Analysis
5-Year Trend Summary: Rapid7, Inc.'s revenue has grown significantly by 61% over the 5-year period, indicating strong business expansion. The most recent EPS of $-0.44 indicates the company is currently unprofitable.
RPD Growth Metrics (YoY)
RPD Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $214.7M | $9.8M | $0.15 |
| Q2 2025 | $208.0M | $6.5M | $0.09 |
| Q1 2025 | $205.1M | $1.4M | $0.02 |
| Q3 2024 | $198.8M | $16.6M | $0.22 |
| Q2 2024 | $190.4M | $8.2M | $0.11 |
| Q1 2024 | $183.2M | $2.3M | $0.03 |
| Q3 2023 | $175.8M | -$28.7M | $-0.49 |
| Q2 2023 | $167.5M | -$39.6M | $-0.68 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
RPD Capital Allocation
RPD SEC 10-K & 10-Q Filing Analysis
Access official SEC EDGAR filings for Rapid7, Inc. (CIK: 0001560327)
📋 Recent SEC Filings
❓ Frequently Asked Questions about RPD
What is the AI rating for RPD?
Rapid7, Inc. (RPD) has a Combined AI Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are RPD's key strengths?
Claude: Exceptional free cash flow generation ($146.2M, 17% margin) far exceeds accounting profits, indicating high-quality earnings and strong underlying cash generation. Fortress balance sheet with minimal leverage (0.09x debt/equity), $246.7M cash position, and low capital requirements typical of software businesses. ChatGPT: Strong free cash flow (17% FCF margin). High gross margin (70.3%) supporting scalability.
What are the risks of investing in RPD?
Claude: Critical operating margin of only 1.3% on $604.8M gross profit signals severe operating expense management issues; unusual for software companies and suggests structural cost challenges. Anemic revenue growth of 1.9% YoY combined with declining net income (-8.4% YoY) indicates lack of growth momentum and deteriorating profitability despite top-line expansion. ChatGPT: Muted top-line growth (+1.9% YoY). Very thin operating margin (1.3%) and EPS down 10%.
What is RPD's revenue and growth?
Rapid7, Inc. reported revenue of $859.8M.
Does RPD pay dividends?
Rapid7, Inc. does not currently pay dividends.
Where can I find RPD SEC filings?
Official SEC filings for Rapid7, Inc. (CIK: 0001560327) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is RPD's EPS?
Rapid7, Inc. has a diluted EPS of $0.36.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined rating reflects both perspectives for balanced insights.
Is RPD a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, Rapid7, Inc. has a HOLD rating with 70% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is RPD stock overvalued or undervalued?
Valuation metrics for RPD: ROE of 15.1% (sector avg: 22%), net margin of 2.7% (sector avg: 18%). Compare these metrics with sector averages to assess valuation.
Should I buy RPD stock in 2026?
Our dual AI analysis gives Rapid7, Inc. a combined HOLD rating for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is RPD's free cash flow?
Rapid7, Inc.'s operating cash flow is $153.8M, with capital expenditures of $7.6M. FCF margin is 17.0%.
How does RPD compare to other Technology stocks?
Vs Technology sector averages: Net margin 2.7% (avg: 18%), ROE 15.1% (avg: 22%), current ratio 1.28 (avg: 2.5).