What are the key fundamentals of Rapid7, Inc. (RPD)?

Key fundamentals include P/E ratio, ROE, net margin, debt-to-equity, and free cash flow. These metrics help assess profitability, efficiency, and valuation.

How do I know if RPD is overvalued or undervalued?

Check valuation ratios like P/E, P/B, and PEG. Compare them with sector averages to evaluate if the stock is priced fairly.

What does a high ROE mean for Rapid7, Inc.?

A high ROE suggests efficient use of shareholder equity to generate profit. It often signals strong management and profitability.

Why is the debt-to-equity ratio important?

It shows how much debt Rapid7, Inc. uses to finance operations. A high ratio may mean higher risk in downturns.

What is a good net margin for a company like Rapid7, Inc.?

Net margin indicates how much profit remains after expenses. Higher margins reflect stronger pricing power and cost control.

Should I compare RPD with companies in other sectors?

No. Always compare fundamentals within the same sector. Different industries have different capital structures and profit models.

What role does cash flow play in fundamental analysis?

Cash flow shows how much actual cash a company generates. Strong free cash flow supports dividends, buybacks, and debt reduction.

Rapid7, Inc.

RPD•NASDAQ

Technology

Software - Infrastructure

$23.13

$0.00(0.00%)

Fundamental Analysis of Rapid7, Inc. (RPD)

Comprehensive financial metrics and ratios analysis

EPS (TTM)

$0.41

P/E Ratio

58.63

ROE

9.05%

Net Margin

0.03%

Key Financial Metrices

Valuation Metrics

4 metrics

Market CapTotal market value of outstanding shares

$1.54B

Shares OutstandingTotal number of shares issued

$64.24M

Book Value/ShareNet worth per share

$0.83

Revenue/ShareAnnual revenue per share

$13.30

Profitability Metrics

6 metrics

EPS (TTM)Earnings per share trailing twelve months

$0.41

Net MarginNet income as percentage of revenue

2.99%

Operating MarginOperating income as percentage of revenue

2.90%

ROEReturn on shareholders' equity

905.45%

ROAReturn on total assets

1.54%

ROCEReturn on capital employed

2.33%

Cash Flow Metrics

3 metrics

Free Cash Flow/ShareCash generated per share after capex

$2.49

Cash/ShareCash and equivalents per share

$7.73

FCF YieldFree cash flow as percentage of market cap

10.28%

Dividend Metrics

2 metrics

Dividend/ShareAnnual dividend payment per share

Dividend YieldAnnual dividend as percentage of stock price

Understanding Fundamental Analysis for Investment Decisions

What is Fundamental Analysis?

Fundamental analysis is a comprehensive method of evaluating a company's intrinsic value by examining its financial statements, management quality, competitive advantages, and market position. This analytical approach focuses on determining whether a stock is undervalued or overvalued based on its underlying business fundamentals, providing investors with essential insights for making informed investment decisions.

Key Financial Metrics and Ratios

Essential financial metrics include earnings per share (EPS), price-to-earnings (P/E) ratio, return on equity (ROE), debt-to-equity ratio, and free cash flow. These metrics provide insights into profitability, valuation, financial health, and operational efficiency. Understanding these ratios helps investors compare companies within the same industry and identify potential investment opportunities or risks.

Profitability and Efficiency Analysis

Profitability metrics such as net margin, operating margin, return on assets (ROA), and return on capital employed (ROCE) demonstrate how effectively a company generates profits from its operations. High profitability ratios often indicate strong management, competitive advantages, and sustainable business models. These metrics are crucial for evaluating long-term investment potential and comparing performance across industry peers.

Valuation and Market Position

Valuation ratios including price-to-book (P/B), price-to-sales (P/S), and price-to-earnings-growth (PEG) help determine whether a stock is fairly valued relative to its fundamentals and growth prospects. These ratios, combined with market capitalization and competitive positioning, provide insights into market expectations and potential investment returns. Proper valuation analysis is essential for identifying undervalued opportunities and avoiding overpriced securities.

Risk Assessment and Financial Health

Financial health indicators such as current ratio, debt-to-equity ratio, and cash flow metrics help assess a company's ability to meet its obligations and weather economic downturns. Strong balance sheets with manageable debt levels, adequate liquidity, and consistent cash generation provide stability and flexibility during challenging market conditions. These factors are crucial for risk management in investment portfolios.

Long-term Investment Strategy

Fundamental analysis supports long-term investment strategies by focusing on business quality, competitive moats, and sustainable growth prospects rather than short-term market fluctuations. Investors using fundamental analysis typically seek companies with strong financials, capable management, and clear competitive advantages that can generate consistent returns over extended periods. This approach emphasizes value creation and business fundamentals over market timing and speculation.

Fundamental Analysis FAQ

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