UBS upgrades Rapid7 to Buy as margin story is ‘still discounted’ By

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<span>© Reuters. UBS upgrades Rapid7 (RPD) to Buy as margin story is ‘still discounted’</span><br />
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<p>Shares of <span itemscope="" itemtype=""><span itemprop="name"> <span itemscope="" itemtype=""><span itemprop="name"> Rapid7 Inc </span></span> </span></span>. (NASDAQ:) closed 5.57% higher Monday after UBS upgraded the stock to ‘buy’ from ‘neutral,’ taking note of a margin story that is “still discounted” and a shift to higher growth offerings that is presently underappreciated.</p>
<p>UBS analysts also raised their price target to $70 from $53.</p>
<p>“We see ~4pts of additional OpM expansion in CY24E to mid-teens following the 7pts+ in CY23E. RPD has already executed well on the 3Q restructuring and we expect the company to meet the CY24 FCF target with high single digit opex growth,” said the analysts.</p>
<p>In addition to margin expansion in 2024, analysts also see upside supported by increasing exposure to SecOps and expect over 60% of ARR to come from solutions outside of vulnerability management by CY25E.</p>
<p>“This mix shift should positively affect overall growth as RPD shifts focus towards bigger opportunities,” they noted.</p>
<p>Rapid 7 is also a compelling value proposition, note analysts. “At 21x CY24E EV/FCF, RPD trades at a 6 turn discount to its closest peers (including TENB), for similar growth and improving profitability,” they wrote.</p>
<p>“We don’t think RPD is getting enough credit for its margin efforts or exposure to SecOps modernization trends.”</p>
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<br /><a href="">Source link </a></p><p>The post <a href="">UBS upgrades Rapid7 to Buy as margin story is ‘still discounted’ By</a> first appeared on <a href="">Forex Trader Hub</a>.</p>

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