Rapid7, Inc. (XNAS:RPD) In-Depth Stock/Fundamental/Options Analysis Today

Primary Facts

RPD

Name:

RAPID7, INC. (XNAS:RPD)

Sector:

3.83M

Industry:

Software�Application

CEO:

Mr. Corey Thomas

Total Employees:

2,353

Our Technological Advancement Rating

Our Rating:

Technological advancement compared to industry is -113.98% lower

ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF RAPID7, INC.(RPD) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND SOFTWARE�APPLICATION INDUSTRY. DATE: 07/09/2022

Primary Targets/Price Insights

Previous Close ($) :

53.6

One Month Price Target:

$53.99

Six Month Price Target :

$55.96

Likely Price in One Year's Time:

Ticker:

$58.31

Likely Trading Range Today Under (Normal Volatility)

$53.36

Price Upper limit ($) :

$53.88

Price Lower limit ($) :

Crash Risk Prep/Key Price Levels (High Volatility/Risk)

Price, as per data analysis, isn't likely to fall below:

Today:

$50.47

This week:

$46.61

This month :

$39.61

Other Primary facts

Market Cap:

3.08B

Market Cap Classification:

Mid Cap

Number of Shares

IPO Date:

58.70M

Best/Worst Daily Performance (Last 3+ Years)

Highest Daily Appreciation:

12.51%

-17.4%

Worst Daily Decline:

Our Options Trading Entry Points

Iron Condor entry points for options expiring in 1 week's time

Low risk (<2%) entry points

Buy Call:

Sell Call:

Buy Put:

Sell Put:

$68.11

$61.46

$39.09

$45.74

Medium risk (<10%) entry points

Buy Call

Sell Call

$59.30

Buy Put:

Sell Put:

$57.88

$47.88

$49.32

These entry points can be used for other strategies, such as butterflies, straddles, etc.

Risk-Adjusted returns (Sharpe Ratio) of

RPD

Sharpe Ratio:

1.20%

Comparison:

RPD, is amongst the top 60% stocks with highest risk-adjusted returns

Sharpe ratio is 24.99% higher than the industry

& is -47.14% lower than the market/S&P 500 average

Average Returns/Yield of

RPD

Daily returns:

0.04%

Weekly returns:

0.22%

Monthly returns:

0.87%

Yearly returns:

9.94%

Comparison of returns:

Average annual returns/yield (last 3 years) is 4.65% above industry average

Classification:

RPD, is amongst the top 60% highest yielding stocks in terms of daily returns

Results of T-Test of Returns:

0.89

Statistical test of Returns:

RPD has yielded returns statistically similar to the market

Volatility (measured by Standard Deviation)

Daily Volatility:

2.86%

Weekly Volatility:

6.40%

Monthly Volatility:

12.80%

Yearly Volatility:

44.34%

Volitlilty of last five days (Measured by Standard Deviation)

Average Volatility of this Week:

2.54%

Volatility in last five trading days has been -11.28% below long-term volatility

Value at Risk Analysis (VaR)

Daily VaR:

-5.83%

Weekly VaR:

-13.05%

Monthly VaR:

-26.09%

How Much Can the price of

RPD

Decline in a Recession?

Likely price decline in a recession:

Base case (decline):

-23%

Worst case (decline):

-90.39%

This translates to price declining to:

$41.50

This translates to price declining to:

$5.15

Severe Crash Probability

Risk of crash in next 6/12 months: Medium (<50%)

What is Value at Risk (VaR)?

Risk Fundamentals

RPD is a 84.17% riskier investment compared to the market/S&P 500 & is 57.78% riskier than Nasdaq (IXIC)

Risk (measured by volatility) is -20.38% below industry average

Overall, it is amongst the top 50% most risky stocks

Beta Examination of

RPD

Beta in relation to market/S&P 500--1.31

Expected beta in 1 year's time:

1.012

Expected beta in 3 year's time:

1.432

Unlevered (debt free) Beta:

-0.213

Beta in relation to Nasdaq (XNAS):

1.068

Beta in relation to all global stocks::

0.704

Beta Comparison & Analysis

Beta of competitors/peers::

1.6

Beta is -18.25% lower than peers

Average Industry Beta:

1.335

Beta is -2.04% below industry average

Sustainable Growth Rate Analysis

Sustainable growth rate for this stock/firm:

143.60%

Sustainable growth rate is 361.70% above industry average

Alpha provided | Alpha Analysis

Alpha provided:

-0.017

Alpha is -27.48% below industry average alpha yield

Alpha is -109% below the market average

Analysis of Cost of Capital of

RPD

Equity cost of capital:

0.121

Equity cost of capital is -1.51% below industry mean WACC

Unlevered (without debt) cost of capital:

-1.97%

Before-tax cost of debt:

1.26%

After-tax cost of debt:

1.00%

Overall debt rating:

Highest AAA investment grade

Weighted average cost of capital (WACC):

1.00%

WACC is -54.70% below industry mean WACC

Key Per-Share Metrics & Analysis

Revenue per share:

$9.80

Revenue growth rate per share of (3Y):

-23.04

Annual revenue growth rate is -32.10% below industry average

EPS:

-$2.85

Expected Annual growth rate of EPS (3Y):

34.06%

Expected future EPS growth rate is 24.50% higher than the Software�Application industry

Free cash flow (FCF) per share:

$0.36

Debt per share

$15.45

EBITDA per share

-$1.73

Valuation Analysis Today of

RPD

P/E Ratio:

P/E Ratio of Competitors/Peers:

928.49

RPD is -110.59% undervalued if valued using industry average P/E ratio

P/S (Price to Sales ratio):

5.47

Price to sales ratio is -52.32% below the industry mean

P/B (Price to book value ratio):

-23.04

Price to free cash flow: 147.80

Price to free cash flow ratio is 58.96% higher than the industry

Net income growth rate (3Y):

118.65%

Net income growth rate is -51.41% lower than the industry average net income growth rate

Dividend Analysis

Dividend History:

--$0.00

In-depth Debt & Leverage Analysis

Debt to equity ratio:

-664.18%

Net debt to equity ratio:

-568.96%

Debt to assets ratio:

71.20%

Net debt to assets ratio:

60.99%

Debt-to-asset ratio is 29.76% above industry average

Ability to repay debt:

Interest coverage ratio:

-8.75

Interest coverage ratio is -116.48% less than industry average

Looking forward:

Debt growth rate:

135.08%

Annual debt growth is -86% lower than industry average debt growth rate

Debt repayment rate in last quarter: 0.00%

Analysis of Key Statistics

Correlation of price movement with the market:

0.592

Statistical significance of correlation:

RPD has a statistically significant correlation with the market

Average Correlation of the industry with the market:

0.503

Stock price is 17.61% more correlated with the market, compared to the industry average correlation

R Squared (percentage of price movement explained by movement of the market):

0.503

Correlation of price movement with Nasdaq (^IXIC):

-0.017

Covariance of price movement with the market:

-0.028

Kurtosis

3.678

Returns have moderate fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns

Skewness of returns:

-0.446

Returns are, approximately, symmetrical

Fundamental Analysis & Dupont Analysis of

RPD

Gross Profit Margin Ratio:

267%

Operating Profit Margin Ratio:

-23.87%

Operating profit margin is 24.57% higher than the industry

Net Profit Margin Ratio:

267%

Effective Tax Rate:

-7.66%

Effective tax rate is -129.05% lower than the industry

Dupont Method

Net Profit Margin

Return on Equity Ratio (ROE):

ROA

118.26%

Return on equity (ROE) is -1004.22% lower than the industry

Financial Leverage

Asset Turnover Ratio (ROA):

-12.68%

Return on assets (ROA) is 230.07% higher than the industry

Financial Leverage:

3.5x

Current Ratio:

0.89

Current ratio is -70.16% below industry average

Cash Conversion Cycle (days):

Cash conversion cycle is -2.93% below industry average

The remaining useful life of property plant & equipment is: 12.6 years

Stock based compensation to net income ratio:

-17.91%

In-depth Efficiency Analysis

Revenue generated per employee:

244.5K

Each employee generates -29% less revenue than industry average revenue per employee

EBITDA generated per employee:

- 43.1K

Each employee generates -501% less EBITDA than industry average revenue per employee

Profit generated per employee:

- 68.6K

Each employee generates 293% more net income/profit than industry average revenue per employee

Free cash flow (FCF) generated per employee:

1.6K

Each employee generates -121% less free cash flow than industry average revenue per employee

Assets/Capital per employee

366.8K

Each employee generates -121% less free cash flow than industry average revenue per employee

Research & Development (R&D) Analysis

Research & development (R&D) investment growth rate-- 48.09%

Growth rate in R&D investment/expenditure is 3045.47% higher than the industry

Competitors/Peer firms of

RPD

AMKOR TECHNOLOGY, INC. (XNAS:AMKR)

BUMBLE INC. (XNAS:BMBL)

Novanta Inc. (XNAS:NOVT)

Braze, Inc. (XNAS:BRZE)

LUMINAR TECHNOLOGIES, INC. (XNAS:LAZR)

FRESHWORKS INC. (XNAS:FRSH)

MICROSTRATEGY INCORPORATED (XNAS:MSTR)

NATIONAL INSTRUMENTS CORPORATION (XNAS:NATI)

Current Analyst Ratings

Strong buy�8%

Buy�38%

RISK CONCERN

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