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Rapid7: Securing The Shift To The Cloud

Jun. 11, 2020 6:12 PM ETRapid7, Inc. (RPD)2 Comments
Jackson Fogarty profile picture
Jackson Fogarty


  • Rapid7's SIEM and SOAR solutions comprise less than 40% of revenue generation and serve as strong future catalysts.
  • Total ARR growth of 76% in the past 8 quarters serves as a promising indication of the company's growth opportunities.
  • Future revenue streams will be a function of International and Enterprise expansion along with successful penetration of the SIEM and SOAR markets.

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In an increasingly digital world, cybersecurity is becoming more and more essential to large and small businesses alike. At the center of this transition is Rapid7 (NASDAQ:RPD). With ~28% Revenue growth over the last three years, Rapid7 is a promising company in a broad and expanding cloud-based market. The cybersecurity company is focused on enhancing resolve and efficiency for customers who face constantly evolving cybersecurity challenges. With its diverse portfolio of products, Rapid7 is uniquely positioned to be a leader in the cybersecurity market for years to come.

Product Overview

The company's main revenue driver is in the Vulnerability Risk Management (VM) space. According to the 2019 Forrester Wave Report, Rapid7's InsightVM saw a potential 342% ROI within three years. In addition to this astonishing number, customers also saw a decrease in cybersecurity spending and incident volume. This is evidently a compelling argument for Rapid7 as a leader in the Vulnerability Management space where it competes with Qualys (QLYS) and Tenable (TENB).

Rapid7 also has products in:

  • Security Information and Event Management (SIEM)
  • Application Security
  • Security Orchestration and Automation Response (SOAR)

The company's SOAR solution is called InsightConnect. This product allows customers to customize workflows and tools with over 290 plugins. On the company's 4Q 2019 Earnings Call, CEO Corey Thomas mentioned plans to accelerate investment in this solution in 2020. While in the early stages of its development, he views it as an emerging product in North America.

InsightIDR is the company's SIEM solution, which currently makes up more than 20% of revenue. InsightIDR's competitive

This article was written by

Jackson Fogarty profile picture
I am a Senior Economics Student at The University of North Carolina at Chapel Hill. A student of Ben Graham, my investment objective is to find long-term growth/value stocks with a reasonable margin of safety.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (2)

Nice thorough evaluation. You included the competition which many SA reviewers fail to include. I agree that RPD is an interesting situation but one that needs a little time to see where it goes from here. It's tempting to be early but I agree with all your points, so think moving slow on this will be the prudent move.
mkehir profile picture
($40M) per yr..GAAP..
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