Rapid7, Inc. Fundamental Analysis (NASDAQ: RPD)
Rapid7, Inc. (NASDAQ: RPD) shows weak financial fundamentals with a PE ratio of 39.19, profit margin of 2.35%, and ROE of 12.33%. The company generates $0.9B in annual revenue with weak year-over-year growth of 1.87%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 23.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze RPD's fundamental strength across five key dimensions:
Efficiency Score
WeakRPD struggles to generate sufficient returns from assets.
Valuation Score
ModerateRPD shows balanced valuation metrics.
Growth Score
WeakRPD faces weak or negative growth trends.
Financial Health Score
WeakRPD carries high financial risk with limited liquidity.
Profitability Score
WeakRPD struggles to sustain strong margins.
Key Financial Metrics
Is RPD Expensive or Cheap?
P/E Ratio
RPD trades at 39.19 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, RPD's PEG of -1.57 indicates potential undervaluation.
Price to Book
The market values Rapid7, Inc. at 4.07 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 3.37 times EBITDA. This is generally considered low.
How Well Does RPD Make Money?
Net Profit Margin
For every $100 in sales, Rapid7, Inc. keeps $2.35 as profit after all expenses.
Operating Margin
Core operations generate 1.24 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $12.33 in profit for every $100 of shareholder equity.
ROA
Rapid7, Inc. generates $1.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Rapid7, Inc. produces operating cash flow of $152.49M, showing steady but balanced cash generation.
Free Cash Flow
Rapid7, Inc. generates strong free cash flow of $139.88M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $2.09 in free cash annually.
FCF Yield
RPD converts 17.35% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
39.19
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.57
vs 25 benchmark
P/B Ratio
Price to book value ratio
4.07
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.93
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
4.89
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.80
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.12
vs 25 benchmark
ROA
Return on assets percentage
0.01
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How RPD Stacks Against Its Sector Peers
| Metric | RPD Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 39.19 | 34.93 | Worse (Expensive) |
| ROE | 12.33% | 750.00% | Weak |
| Net Margin | 2.35% | -3058.00% (disorted) | Weak |
| Debt/Equity | 4.89 | 0.65 | Weak (High Leverage) |
| Current Ratio | 0.80 | 6.21 | Weak Liquidity |
| ROA | 1.16% | 308.00% | Weak |
RPD outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Rapid7, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
64.75%
Industry Style: Growth, Innovation, High Beta
High GrowthEPS CAGR
118.65%
Industry Style: Growth, Innovation, High Beta
High GrowthFCF CAGR
2354.57%
Industry Style: Growth, Innovation, High Beta
High Growth