Rapid7 (RPD) Stock Forecast & Price Target

Rapid7 has demonstrated strong performance with its Detection and Response (D&R) segment, which accounts for over 50% of its Annual Recurring Revenue (ARR) at over $419 million, highlighting a stable growth foundation. The company reported a revenue of $218 million, reflecting a year-over-year increase of 1.5%, with a slightly positive outlook for its ARR, which stands at $838 million despite being marginally below market expectations. Additionally, management emphasizes a healthy IT budget outlook, supported by a robust pipeline of larger deals that could enhance future revenue growth beyond current forecasts.

Rapid7 has experienced a downward adjustment in its annual recurring revenue (ARR) guidance, with the company lowering expectations for FY25 to $838 million, flat year-over-year, as it grapples with leadership changes and execution challenges in its Exposure Management segment. The company reported a sequential decline in ARR during 3Q25, exiting the quarter with $837.7 million, which fell short of consensus expectations and marked the second quarter of negative net new ARR this year. Additionally, management's revised revenue guidance for FY25 and lower profitability projections reflect growing concerns over growth sustainability, further contributing to a negative outlook on the stock.