Rapid7 falls as Needham downgrades, citing elevated competitors, weakening economic system

Rapid7 (NASDAQ:RPD) shares fell on Friday as funding agency Needham downgraded the cybersecurity software program firm, citing elevated competitors and considerations from the worldwide economic system.

Needham analyst Alex Henderson lowered his score to carry from purchase, noting that corporations like CrowdStrike (CRWD) and Palo Alto Networks (PANW) supply “richer, broader capabilities,” whereas others, comparable to Tenable (TENB) and Qualys (QLYS) additionally look like gaining steam.

Rapid7 (RPD) shares fell practically 5% to $43.10 in premarket buying and selling.

In a separate observe, Henderson upgraded Qualys (QLYS), noting it’s appears to be like as whether it is “getting more healthy and constructing out its gross sales capability.”

Henderson additionally famous that the broader macro circumstances symbolize “incremental pressures” in areas comparable to industrial and mid-market. The analyst added that though Rapid7 (RPD) has “low” worldwide publicity at simply 25% of revenues, it has accounted for between 40% and 50% of it progress.

“We predict the financial pressures and hard comps set a difficult stage going into [full-year 2023],” Henderson defined, including that the second-half of this yr can be more likely to be “difficult on a variety of metrics.”

In late September, BTIG initiated protection on Rapid7 (RPD), noting that its valuation is “compelling,” nevertheless it has an absence of catalysts that might transfer the inventory.

Analysts are largely constructive on Rapid7 (RPD). It has a BUY score from Looking for Alpha authors, whereas Wall Road analysts additionally price it a BUY. Conversely, Looking for Alpha’s quant system, which persistently beats the market, charges RPD a HOLD.