Piper Sandler has maintained a positive outlook on Rubrik Inc (NYSE: RBRK) with a reiterated Overweight rating and a steady $42.00 price target.
The affirmation comes despite the stock experiencing a roughly 5% decline in after-hours trading.
The investment firm's confidence in Rubrik is bolstered by several growth factors, including the company's focus on resilience, market share gains associated with the transition to Generation Z, and the increasing importance of data security.
These elements are expected to contribute to an improving free cash flow (FCF) profile, which Piper Sandler believes will result in positive FCF in the second half of fiscal year 2025 and into fiscal year 2026.
Rubrik's ongoing transition is anticipated to cause short-term fluctuations in metrics such as billings. However, the company is projected to conclude the year with an annual recurring revenue (ARR) growth rate exceeding 30%. The emphasis on resilience has been heightened following recent service outages and a broader industry shift towards prioritizing data security.
In other recent news, Rubrik saw a significant 40% year-over-year increase in its Subscription Annual Recurring Revenue (ARR), exceeding expectations. The company's cloud segment also saw substantial growth, nearly doubling in size.
Despite concerns about negative net new annual recurring revenue (NNARR) growth, Rubrik's net revenue retention (NRR) remains strong, exceeding 120%. Citi maintained its Buy rating on Rubrik, increasing the price target to $48 from $47, reflecting confidence in the company's growth opportunities.
Mizuho Securities also maintained its Outperform rating on Rubrik, with a steady price target of $43.00, following the company's strong earnings report. Wells Fargo (NYSE:WFC) adjusted Rubrik's price target to $40, maintaining an Overweight rating on the stock.
Rubrik's recent acquisition of an unnamed company, focusing on cyber resilience and AI-driven recovery, was also noted. Goldman Sachs (NYSE:GS) reaffirmed its Buy rating and $48.00 price target for Rubrik, following impressive fiscal results and raised full-year guidance.
InvestingPro Insights
As Rubrik Inc (NYSE:RBRK) continues to navigate its transition phase, InvestingPro data sheds light on the company's financial health and market performance. With a market capitalization of $5.77 billion, Rubrik's financials reflect a challenging landscape with a negative P/E ratio of -1.84, suggesting that the company is not currently profitable. Despite this, the company holds a strong cash position relative to its debt, which is a positive sign for its financial resilience. Analysts have taken note of Rubrik's potential, with eight analysts revising their earnings upwards for the upcoming period, indicating a belief in the company's growth prospects.
While the company's revenue has grown by 15.98% over the last twelve months as of Q1 2025, Rubrik is trading at a high revenue valuation multiple, which could be a concern for value-focused investors. The company's emphasis on data security and market share gains in the Generation Z transition may yet prove to be key drivers of future profitability, aligning with Piper Sandler's positive outlook. It's also worth noting that Rubrik does not pay a dividend, which could influence investor decisions depending on their income strategy.
For investors considering Rubrik, there are additional InvestingPro Tips available that delve deeper into the company's financials and market positioning. Currently, there are 5 more tips listed on InvestingPro that could provide further insights into whether Rubrik's current valuation and growth trajectory align with their investment goals.
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