GET DAILY SIGNALSWhy Is Rapid7, Inc. (RPD) Stock Down -2.61% Today?
Key Takeaways
- RPD shares fell about 2.61% in Tuesday's session, trading near $14.58 after closing the prior session at $14.97.
- The decline extends a post-earnings slide as Wall Street reacts to a shrinking revenue base and a wave of cautious analyst ratings and price-target cuts.
- Third-quarter results, reported Nov. 4, showed a profit beat but a roughly 2.5% year-over-year revenue decline and falling annual recurring revenue (ARR).
- Sell-side caution has mounted, with firms including J.P. Morgan and Morgan Stanley maintaining bearish ratings in the days after the report.
- Broader cybersecurity sector sentiment and concerns about AI-driven competition are weighing on the name.
- Traders are watching for stabilization in ARR, any turnaround in vulnerability-management demand, and the company's next earnings update.
- For additional detail, explore Price Targets, Earnings, and Forecast pages for RPD.
- Discover how automated strategies are positioning across the market by exploring Trending AI Robots.
Opening Summary
Rapid7, Inc. (RPD), a Boston-based provider of AI-powered managed cybersecurity operations, saw its shares move lower on Tuesday, slipping roughly 2.61% to about $14.58 from a prior close of $14.97. The move extends a period of post-earnings pressure for the vulnerability-management and detection-and-response software vendor, whose shares have been volatile since its latest quarterly report. Markets attributed the decline primarily to lingering disappointment over the company's contracting revenue and annual recurring revenue, compounded by a cluster of cautious analyst actions issued in the days following the earnings release.
Earnings Results and Soft Guidance Weigh on Sentiment
The primary backdrop for the slide is RPD's third-quarter earnings report, released on Nov. 4. While the company beat consensus on adjusted earnings per share, the top line told a more concerning story. Total revenue declined roughly 2.5% year over year to about $212.4 million, and annual recurring revenue fell approximately 2.2% to around $819.7 million. Management has been deliberately winding down non-core standalone products as part of a restructuring effort, a strategy that supports profitability but pressures growth. Investors have struggled to reconcile improving margins with a shrinking revenue base, leaving the stock susceptible to selling pressure as that dynamic is digested.
Analyst Downgrades and Price-Target Cuts
A steady drumbeat of bearish analyst commentary has reinforced the negative tone. In the sessions following the report, J.P. Morgan reiterated a Sell rating with a $12 price target, while Morgan Stanley reiterated a Sell with a $9 target. Other firms trimmed their outlooks without turning outright bearish: Susquehanna lowered its target to $15 from $18, and Mizuho moved to $15. The common thread across the notes is skepticism about near-term revenue recovery, ongoing executive and sales-operational transitions, and whether the current valuation is justified while growth remains negative. This combination of downgrades and target reductions has kept a lid on any rebound attempts.
Sector and Competitive Pressures
RPD is also contending with sector-level headwinds. Analysts have flagged slower growth in the legacy vulnerability-management market relative to the broader cybersecurity industry, as well as intensifying competition from larger platform vendors and newer AI-driven security offerings. These structural concerns weigh disproportionately on mid-cap names with exposure to maturing product categories. While the detection-and-response portion of the business continues to grow, it has not fully offset declines elsewhere, and the competitive landscape remains a key overhang on investor confidence.
Market Context and Trading Activity
Trading activity on Tuesday was relatively muted rather than panicked, consistent with a modest continuation move rather than a single headline-driven shock. The stock has been prone to sharp swings, having posted multiple double-digit percentage moves over the past year, which makes a sub-3% daily decline notable but not extraordinary. The move reflects a stock still working through its post-earnings range, with the prior session's gains being partially given back. Technical support near the recent consolidation zone and moving-average levels are being closely watched by traders as the name searches for a stable footing.
What Comes Next for RPD
Looking ahead, investors will focus on whether RPD can stabilize annual recurring revenue and demonstrate that the wind-down of non-core products is nearing completion. The company's restructuring plan, which includes a roughly 12% workforce reduction announced earlier in 2026, is intended to simplify operations and improve profitability, but the timing of any return to revenue growth remains uncertain. Upcoming earnings, any further analyst rating changes, and developments in the competitive cybersecurity landscape will be key catalysts. Risks include continued vulnerability-management softness, execution risk around the turnaround, and broader volatility in the technology sector.
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Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
RPD in downward trend: price expected to drop as it breaks its higher Bollinger Band on October 22, 2026
RPD broke above its upper Bollinger Band on October 22, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options. The A.I.dvisor looked at 30 similar instances where the stock broke above the upper band. In 29 of the 30 cases the stock fell afterwards. This puts the odds of success at 90%.
Technical Analysis (Indicators)
Bearish Trend Analysis
The 10-day RSI Indicator for RPD moved out of overbought territory on October 30, 2026. This could be a bearish sign for the stock. Traders may want to consider selling the stock or buying put options. Tickeron's A.I.dvisor looked at 22 similar instances where the indicator moved out of overbought territory. In 19 of the 22 cases, the stock moved lower in the following days. This puts the odds of a move lower at 86%.
The Momentum Indicator moved below the 0 level on November 06, 2026. You may want to consider selling the stock, shorting the stock, or exploring put options on RPD as a result. In 68 of 76 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are 89%.
The Moving Average Convergence Divergence Histogram (MACD) for RPD turned negative on November 04, 2026. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 49 similar instances when the indicator turned negative. In 42 of the 49 cases the stock turned lower in the days that followed. This puts the odds of success at 86%.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where RPD declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 87%.
Bullish Trend Analysis
The Stochastic Oscillator demonstrated that the ticker has stayed in the oversold zone for 2 days, which means it's wise to expect a price bounce in the near future.
Following a +4.04% 3-day Advance, the price is estimated to grow further. Considering data from situations where RPD advanced for three days, in 186 of 267 cases, the price rose further within the following month. The odds of a continued upward trend are 70%.
The Aroon Indicator entered an Uptrend today. In 80 of 123 cases where RPD Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are 65%.
Fundamental Analysis (Ratings)
The Tickeron PE Growth Rating for this company is 23 (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is 35 (best 1 - 100 worst), indicating steady price growth. RPD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 59 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Valuation Rating of 72 (best 1 - 100 worst) indicates that the company is slightly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (5.030) is normal, around the industry mean (16.272). P/E Ratio (47.355) is within average values for comparable stocks, (52.956). Projected Growth (PEG Ratio) (0.608) is also within normal values, averaging (3.648). Dividend Yield (0.000) settles around the average of (0.430) among similar stocks. P/S Ratio (0.968) is also within normal values, averaging (103.889).
The Tickeron Profit vs. Risk Rating rating for this company is 100 (best 1 - 100 worst), indicating that the returns do not compensate for the risks. RPD’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 92, placing this stock worse than average.
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General Information
a provider of security data and analytics solutions
Industry ComputerCommunications
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