Amid the continuous wave of digitization and artificial intelligence (AI) advancements, the value of data has surged significantly. Companies providing innovative data security and cloud management solutions have taken center stage. Among them stands Rubrik (RBRK), a key player in data management and cloud security, making a mark since its inception in 2014. Despite being a newcomer, Rubrik has rapidly emerged as a leading force in cloud data management and cybersecurity.
Rubrik attained unicorn status within a short span, a feat achieved through a series of well-backed funding rounds spearheaded by major venture capital entities. The term “unicorn” designates privately held startups valued at over $1 billion. Notably, Rubrik entered this elite category swiftly, unlike the norm of most companies taking seven years or longer to do so.
April saw Rubrik’s public debut via an initial public offering (IPO) priced at $32 per share. Post-IPO, the company boasts a $5.7 billion valuation, with its stock currently down 17% from peak levels. Yet, Wall Street regards RBRK as a “strong buy,” projecting a potential 42% upside. Such statistics suggest the present dip could be a golden opportunity to invest in this cybersecurity software firm. Let’s delve into why.
Unveiling Rubrik’s Financials
Rubrik’s cutting-edge products leverage machine learning to deliver backup and recovery solutions, safeguarding data from cyber threats and operational mishaps. With organizations increasingly transitioning operations to the cloud and cyberattacks on the uptick, the demand for robust security and data protection tools like Rubrik’s has surged.
The firm is applauded for simplifying data management, fortifying enterprise data against cyber risks, automating workflows, and offering ransomware protection. These attributes are vital in today’s intricate data landscape.
In the second quarter of fiscal 2025, Rubrik witnessed a 35% year-on-year revenue surge to $205 million. The subscription ARR (annual recurring revenue) soared by 40% to hit $919.1 million, underscoring customer confidence in the firm’s products.
While not profitable currently, Rubrik reported a GAAP net loss per share of $0.98, a drop from $1.35 in the corresponding quarter last year. Management anticipates full-year revenues ranging between $830 million and $838 million, aligning with consensus estimates. Subscription ARR could fall within $1.026 billion to $1.032 billion.
Analysts predict a 27.5% revenue surge to $1.06 billion in fiscal 2026. Additionally, Rubrik forged a strategic alliance with Microsoft (MSFT) in 2021, strengthening its presence in the cloud security domain. This collaboration aims to enhance data security and resilience in Microsoft Azure environments.
Recently, Rubrik teamed up with cybersecurity firm CrowdStrike (CRWD) to integrate the latter’s Falcon XDR platform and Rubrik Security Cloud, hastening data security transformation. Another partnership was formed with Mandiant, an arm of Alphabet’s (GOOGL) Google Cloud, aiming for seamless integration of Mandiant Threat Intelligence with Rubrik Security Cloud, to aid organizations pre, post, and mid-cyberattacks for swift recovery and resumption of business operations.
Analysts’ Take on Rubrik Stock
Wall Street remains resolute in its “strong buy” stance on Rubrik stock, with all 16 analysts covering the stock giving it a top-tier endorsement. Recently, Robert W. Baird analyst Shrenik Kothari maintained a “buy” rating and set a $42 price target, lauding the upsurge in the firm’s subscription ARR, indicative of a more stable and recurring revenue stream.
Following a robust quarter, analysts at Citi, Barclays, Wells Fargo, Wedbush, and more reiterated their “buy” ratings for Rubrik stock.
With analysts averaging a price target of $44.75, Wall Street foresees a potential 40.1% upside in the next 12 months. Moreover, the Street’s highest target estimate of $52 implies a staggering 62.8% surge from current levels.
Final Thoughts on Rubrik Stock
Rubrik boasts robust financial backing, strategic collaborations, and a product suite addressing critical data protection challenges. It undoubtedly remains a focal point for tech investors in the foreseeable future. However, being a growing entity in a fiercely competitive landscape, Rubrik’s journey to profitability may be a gradual one. This soaring AI tech stock suits investors with a risk appetite and a long-term investment horizon.
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On the publication date, Sushree Mohanty had no positions in the mentioned securities directly or indirectly. All information in this article is purely for informative purposes.
The views expressed herein are solely the author’s and may not align with those of Nasdaq, Inc.
