RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Rapid7, Inc. (XNAS:RPD) InDepth 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:
D
Technological advancement compared to industry is 113.98% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONGTERM 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.
RiskAdjusted returns (Sharpe Ratio) of
RPD
Sharpe Ratio:
1.20%
Comparison:
RPD, is amongst the top 60% stocks with highest riskadjusted 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 TTest 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 longterm 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 5001.31
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%
Beforetax cost of debt:
1.26%
Aftertax 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 PerShare 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
$0.00
$0.00
$0.00
$0.00
$0.00

Indepth 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%
Debttoasset 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 fattails (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):
92
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%
Indepth 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%